shares of figma Prices rose on Thursday, but fell far short of the initial post-earnings surge.
Shares rose as much as 15% after the bell Wednesday, when the design software maker reported fourth-quarter results that beat analysts’ expectations and offered a rosy outlook.
Figma’s revenue for the period increased 40% year-over-year to $303.8 million. The company 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, for the fourth quarter of 2024.
The company expects first-quarter sales to be between $315 million and $317 million, representing 38% year-over-year growth. Analysts polled by LSEG had expected $292 million.
Analysts at Bank of America said Figma’s fourth-quarter results were strong, driven by its guidance. The company said all of its key growth drivers were “very much in place” but could still face headwinds due to broader market uncertainty.
“While Figma’s AI monetization schedule is certainly on track, given the bearish sentiment towards the app in general, Figma’s stock price may remain under pressure until concrete earnings are disclosed,” analysts wrote in a note Wednesday.
In recent months, investors have worried about the potential for artificial intelligence to disrupt software companies, leading to a massive sell-off in the sector. Shares of the iShares Expanded Technology Software Sector ETF are down more than 20% since the beginning of the year.
Figma, which was caught up in the sale, is working on incorporating AI into its products. The company announced a partnership with AI startup Anthropic on Tuesday.
Figma’s 1-year stock price chart.
“If you look at software, not only is it not going away, there’s going to be a lot more of it than ever before,” Figma CEO Dylan Field said in an interview Wednesday.
However, he said, “competition may intensify” in the market.
Analysts at Morgan Stanley said that even Figma’s “best-in-class growth rate” won’t protect the stock from “growing investor concerns about GenAI’s disruptive impact.”
They said the company’s fourth-quarter results suggest it is a strong participant in the AI innovation cycle and is not a company at risk of disruption.
Analysts pointed to increasing usage of Figma’s AI-based tools, expanding partnerships with AI companies and competitive monetization avenues.
“In conclusion, we feel good about Figma’s growing portfolio of solutions and its position in the world of AI after printing Q4, and with the stock price down significantly, we think we can expect even more to come.”
“The stock offers attractive risks and rewards,” the analysts wrote in a note Thursday.
—CNBC’s Jordan Novet contributed to this report
