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Figma’s Q2 2025 Earnings: +40% Growth, Paper-Thin Margins, and a 10% Stock Slide
Figma’s Q2 2025 earnings report reads like a Silicon Valley paradox: a company posting blistering growth, inching toward profitability, but still spooking investors into a -10% selloff. Revenue surged 41% to $249.6 million, GAAP net income clocked in at $28.2 million, and cash flow margins looked like something most SaaS firms would envy. Yet the reaction wasn’t applause - it was skepticism, driven by wafer-thin margins, accounting quirks, and a looming tidal wave of insider share unlocks.
#Headline Financials: Record Growth Meets Skeptical Investors
The headline numbers are impressive: 41% revenue growth year-over-year, GAAP operating income of $2.1 million (a 1% margin), and non-GAAP operating income of $11.5 million (5% margin). Gross profit came in at $221.8 million, translating to an 89% GAAP gross margin - up 11 percentage points from last year. Cash from operations hit $62.5 million, with free cash flow of $60.6 million, both representing mid-20% margins.
Net Income
$28.2 million vs. a $827.9 million loss in Q2 2024.
Cash & Marketable Securities
$1.6 billion, including a new $30.1 million allocation to digital assets.
Operating Expenses
$219.7 million vs. $1.03 billion last year, reflecting the unwinding of extraordinary stock comp tied to the abandoned Adobe merger.
Other Income
$37.0 million, largely investment gains, boosting bottom-line profitability.
Strip out investment gains and the massive year-over-year collapse in stock-based comp, and the GAAP net income looks much less durable. The quality of earnings is the Achilles’ heel here - the market noticed.
#Customer Economics: Expansion is Carrying the Story
Growth wasn’t just a function of adding new customers; it was driven by deeper penetration into existing accounts. Figma’s Net Dollar Retention rate for accounts over $10,000 ARR held steady at 129%, meaning those customers expanded spend by nearly a third year-over-year. That’s about as good as SaaS economics get.
Customers > $10k ARR
11,906 as of June 30, 2025.
Customers > $100k ARR
1,119, up significantly from last year, reflecting Figma’s growing enterprise footprint.
Product Adoption
Over 80% of customers used two or more products, and two-thirds used three or more - a level of cross-sell penetration that signals sticky, expanding accounts.
Deferred Revenue
$433.1 million, up from $381.4 million at year-end, providing visibility into future growth.
This dynamic explains why free cash flow margins look stronger than operating margins. Enterprises are pre-paying for multi-year contracts, essentially funding Figma’s runway.
#Product Strategy: From Design Tool to Workflow Platform
Figma doubled its product portfolio this quarter, launching Figma Make (AI prototyping), Figma Draw (visual expression), Figma Sites (design-to-web publishing), and Figma Buzz (marketing asset creation). Dev Mode MCP added a new AI-enhanced bridge between design and code, tightening integration with developer workflows.
Two acquisitions - Modyfi (motion and animation) and Payload (headless CMS) - added adjacent capabilities. Together, these moves push Figma away from being a single-product design tool and closer to a full-stack design-to-deployment platform. That’s ambitious, but it risks spreading resources thin at a time when investors want margin discipline.
The timing matters: Config, Figma’s annual user conference, also occurred this quarter, temporarily inflating sales and marketing costs. Management acknowledged the drag but framed it as strategic community investment - a reminder that not every cost cut is desirable.
#Beneath the Surface: Accounting, Cash, and Quiet Risks
Look closely at the P&L, and the narrative shifts. R&D dropped from $536 million last year to $83 million. Sales and marketing fell from $276 million to $98 million. G&A collapsed from $220 million to $39 million. These aren’t frugality triumphs - they’re the absence of one-off stock comp and merger-related charges. Investors will rightly question whether today’s leaner profile is repeatable.
Other income of $37 million - driven by investment gains - contributed more than the $2 million in operating income. Remove it, and net income would barely register. This makes profitability look fragile, if not cosmetic.
On the balance sheet, goodwill and intangibles climbed to $37.7 million, reflecting the recent acquisitions. Digital assets appeared at $30.1 million - a head-scratcher for a newly public company still trying to earn investor trust. Meanwhile, deferred revenue’s steady rise offers real evidence of locked-in demand.
#Why the Stock Fell -10%: Context Matters
Three factors explain the selloff. First, margins remain razor thin. Investors wanted operating leverage, but GAAP operating margin was just 1% - the kind of number that makes you wonder if scale actually helps profitability here.
Second, lock-up dynamics cast a shadow. With 25% of employee-held shares eligible for sale starting September 5, 2025, supply pressure is imminent. The extended lock-up structure adds even more waves through 2026, including potential sales of up to 39 million shares after Q2 2025 results and another 44 million after year-end 2025.
Third, the quality of earnings gave pause. A $856 million swing in net income year-over-year sounds great, but when it’s mostly the absence of last year’s equity comp hangover and some timely investment gains, investors see through it. The growth story is intact, but the profitability story is still unwritten.
#Outlook: Growth Secured, Credibility Pending
For Q2, Figma guided revenue to $263–265 million, or 33% growth at the midpoint. For full-year 2025, revenue guidance is $1.021–1.025 billion, implying 37% growth. Non-GAAP operating income is expected between $88 and $98 million. Those are strong numbers, but they rely heavily on maintaining enterprise expansion and cross-sell momentum.
The problem is sentiment. Figma already boasts gross margins near 90%, cash reserves of $1.6 billion, and customer retention that would make most SaaS firms jealous. But when expectations are perfection, even a solid quarter feels like a miss. Investors are waiting for proof that profitability is sustainable - not just a quirk of timing and accounting.
#Bottom Line
Figma’s Q2 2025 results show a company with enviable growth, sticky enterprise customers, and a war chest to keep building. But they also reveal a business still leaning on accounting relief and prepayments to look profitable. Investors punished the stock not because the growth story faltered, but because the profitability story still looks like a rough sketch rather than a finished design.
If management can prove that operating leverage is real - beyond the disappearance of one-time charges - Figma could cement its role as the design-to-deployment hub for the modern digital economy. Until then, Wall Street’s caution is rational. Growth is undeniable, but credibility will take more than one glossy earnings report.
To view the full earnings report document from Figma, click here.