Figma’s stock dropped 14% in after-hours trading following the company’s first earnings report since its July IPO, despite strong revenue growth and a turnaround in profitability. The design platform reported second-quarter revenue of $177.2 million, a 41% year-over-year increase, surpassing its earlier preliminary estimate of $247 million to $250 million. Net income reached $846,000, marking a dramatic improvement from a $827.9 million loss in the same period last year. Adjusted operating income came in at $11.5 million, within the previously guided range of $9 million to $12 million. For the third quarter, Figma forecast revenue between $263 million and $265 million—about 33% growth at the midpoint—exceeding the LSEG consensus of $256.8 million. Full-year guidance includes revenue of over $1.02 billion (37% growth) and adjusted operating income of $88 million to $98 million, both above analyst expectations. The growth was fueled by expanded customer engagement, particularly through new offerings like Dev Mode, which enables developers to implement designs directly from Figma. In Q2, the company launched Figma Make, an AI-powered tool that generates designs from text prompts, and Figma Sites, which converts designs into live websites. It also acquired Modyfi, a vector graphics startup, and Payload, a content management system provider, signaling strategic moves into AI and developer tooling. While Figma hasn’t yet monetized its AI features, CFO Praveer Melwani confirmed that underlying costs are already factored into the business model and hinted at future AI credit purchases. CEO Dylan Field emphasized that AI is enhancing, not replacing, the role of designers. He noted that as software becomes easier to build with AI, the need for human creativity and judgment grows. Figma has adopted AI-driven “vibe-coding” tools internally but remains focused on empowering designers. The company maintained a strong 129% net retention rate, slightly down from 132% in Q1, indicating robust customer expansion. Figma’s IPO price was $33, with shares surging to $115.50 on debut. After a volatile start, the stock closed at $68.13 on Wednesday. A 25% employee share lockup is set to expire on September 4, with an additional 35% locked until August 2026—though over half of Class A shares are under extended lockup agreements. Field stressed the importance of transparency around these vesting schedules for investor clarity. The company ended June with $1.6 billion in cash and equivalents, including $90.8 million in a Bitcoin ETF. Field clarified that Figma is not a crypto-focused firm, but views Bitcoin as a diversification tool within its treasury strategy, distancing itself from high-profile crypto advocates like Michael Saylor. Industry analysts view the earnings as a strong debut for a post-IPO tech firm, particularly given the AI-related headwinds many software companies face. While the stock drop reflects investor caution around valuation and future monetization, Figma’s growth trajectory, product innovation, and financial discipline suggest long-term resilience. The company’s ability to integrate AI without disrupting its core user base could set it apart in a competitive design and development ecosystem.