Figma’s stock dropped 14% in extended trading on Wednesday after the design software company released its first earnings report since going public in July. Despite strong revenue growth and a shift toward profitability, investor concerns about future AI-driven competition and slowing customer expansion led to the sell-off. In the second quarter, Figma reported revenue of $247 million to $250 million, a 41% year-over-year increase from $177.2 million. This exceeded the company’s earlier preliminary estimate and surpassed the LSEG consensus of $247.5 million. The company also reported a net income of $846,000, a significant improvement from a net loss of $827.9 million in the same period last year. Adjusted operating income reached $11.5 million, within the previously issued range of $9 million to $12 million. For the third quarter, Figma forecast revenue between $263 million and $265 million—representing about 33% growth at the midpoint—above the LSEG consensus of $256.8 million. The company also projected full-year revenue of over $1.02 billion, a 37% increase from the previous year, surpassing the $1.01 billion consensus. Adjusted operating income for the year is expected to be between $88 million and $98 million. Figma’s growth has been driven by increased adoption of its premium offerings, including Dev Mode, which helps developers implement designs, and new AI-powered features like Figma Make and Figma Sites. The company also acquired Modyfi, a vector graphics startup, and Payload, a content management system provider, to strengthen its product suite. Although Figma has not yet started charging for its AI tools, the company says it has already factored the associated costs into its pricing model. CFO Praveer Melwani said the company plans to introduce optional AI credits for purchase in the future. Despite concerns about AI replacing human roles, CEO Dylan Field said he sees no evidence of that happening internally. Instead, he believes AI will amplify the importance of human designers by making software development faster and more accessible. Field acknowledged Figma’s own use of AI-powered “vibe-coding” tools but emphasized the irreplaceable value of design expertise. Figma’s net retention rate fell slightly to 129% in the second quarter, down from 132% in the first quarter, signaling a modest slowdown in upselling to existing customers. However, the company still reported 1,119 customers generating over $100,000 in annualized revenue—up from 1,031 in the prior quarter. As of June 30, Figma held about $1.6 billion in cash, cash equivalents, and marketable securities, including $90.8 million invested in a Bitcoin ETF. Field clarified that the company is not a Bitcoin-focused entity, but views the holding as part of a diversified treasury strategy. Following its IPO at $33 per share, Figma’s stock surged to $115.50 on its debut. It closed at $68.13 on Wednesday. A 25% employee share lockup is set to expire after market close on September 4, with the remaining 35% of shares unlocking in August 2026. Field emphasized the importance of transparency around these timelines for investors.