Figma shares climb on earnings beat but analysts say AI risk remains
shares figma It traded higher on Thursday but remains well short of the initial rally following earnings.
The stock rose as much as 15% after the bell on Wednesday, when the design software maker reported fourth-quarter results that beat analysts’ expectations and offered encouraging guidance.
Figma’s revenue increased by 40% annually during this period, reaching $303.8 million. It reported a net loss of $226.6 million, or 44 cents per share, compared to net income of $33.1 million, or 15 cents per share, in the fourth quarter of 2024.
The company expects to report revenue of $315 million to $317 million in the first quarter, representing 38% annual growth. Analysts surveyed by LSEG were expecting $292 million.
Analysts at Bank of America said Figma’s fourth-quarter results were solid and its guidance upfront. They said all key growth drivers were “in place” at the company, but the company could still face some headwinds due to broader market uncertainty.
“Figma’s AI monetization schedule is certainly on track, but given the bearish sentiment on apps in general, Figma shares could remain under pressure until a concrete earnings release,” analysts wrote in a note on Wednesday.
In recent months, investors have become concerned about the potential for artificial intelligence to disrupt software companies, leading to a massive selloff in the industry. Shares of the iShares Extended Technology Software Sector ETF are down more than 20% year to date.
Caught up in sales, Figma is working to add artificial intelligence to its products. The company announced Tuesday that it is partnering with artificial intelligence startup Anthropic.
Figma one year stock chart.
“If you look at software, it’s not just going to disappear, it’s going to be much more of it than ever before,” Figma CEO Dylan Field said in an interview Wednesday.
But he noted that the market is “potentially becoming increasingly competitive.”
Analysts at Morgan Stanley said even Figma’s “best-in-class growth rates” couldn’t insulate the shares from “growing investor concerns about the disruptive effects of GenAI.”
They said the company’s fourth-quarter results showed that the company was not at risk of disruption but was a strong participant in the AI innovation cycle.
Analysts noted the increased use of Figma’s AI-based tools, expansion of partnerships with AI companies, and competitive monetization avenues.
“As a result, we came out of the Q4 edition feeling better about Figma’s expanding portfolio of solutions and its position in the AI world, and we see much more to come as shares have pulled back significantly.
“Attractive risk/reward in stocks,” analysts wrote in a note Thursday.
— CNBC’s Jordan Novet contributed to this report
