Figma Shares Surge 13% in August Following Strong Quarterly Results and Sector-Wide Recovery

Key Points

• Figma exceeded Wall Street expectations for both revenue and earnings, though the initial reaction from investors was mixed.

• Broader software sector earnings indicated resilience even amid ongoing concerns about artificial intelligence disruption.

• Figma posted its third consecutive quarter of accelerating revenue growth, signaling sustained momentum.

Shares of Figma (NYSE: FIG) advanced last month on the back of a wider recovery across the industry, supported by easing concerns over AI disruption and another robust earnings report from the cloud-based design platform, despite an initial post-earnings decline.

According to data from S&P Global Market Intelligence, the stock concluded August with a 13% gain. As illustrated in the chart below, the share price experienced notable volatility throughout the month. It declined following the earnings release early in the period, but rebounded sharply on August 13 and again on August 27, the latter coinciding with a strong earnings report from Salesforce.

FIG data by YCharts

What happened to Figma

After gaining ground on August 4 in sympathy with Palantir, which rallied following its own earnings report, Figma shares dropped on August 6 when it released its quarterly results, even though the figures topped analyst forecasts.

Second-quarter revenue climbed 48%, marking the third consecutive quarter of accelerating growth, with the company attributing the performance in part to new AI-powered offerings such as Code Layers. Revenue of $370.1 million surpassed the consensus estimate of $351.5 million.

Customer growth remained robust across the board. The company reported adjusted earnings per share of $0.08, up from break-even adjusted EPS in the year-ago quarter, comfortably beating the $0.04 estimate.

Figma also lifted its full-year guidance, projecting revenue growth of 39% to a range of $1.463 billion to $1.467 billion.

Despite the solid results, investors expressed caution over rising costs, as the cost of revenue more than doubled during the quarter due to infrastructure spending to support new AI features. The company also reported a wide GAAP loss, driven largely by stock-based compensation expenses that consumed roughly 40% of revenue.

The stock quickly recovered thereafter. It rallied 11% on August 13 following a softer-than-expected CPI report that alleviated concerns about further interest rate hikes, and climbed again on August 27 in tandem with Salesforce’s strong results, which underscored the software sector’s capacity to continue expanding in the AI era.

Image source: Figma.

What’s next for Figma

Figma continues to face skepticism from investors regarding its ability to thrive in the AI era. While three consecutive quarters of accelerating revenue should help alleviate those concerns, the rising cost of revenue remains a potential headwind.

Overall, the company appears well-positioned as it competes with Adobe for leadership in the design software market, though it will need to address investor worries about margin compression.

Jeremy Bowman has positions in Figma. The Motley Fool has positions in and recommends Adobe, Figma, Palantir Technologies, and Salesforce. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

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