Figma: A Risky Play, Honestly

by

Right. Figma. (FIG 0.12%). Everyone lost their minds when this thing IPO’d at $33, didn’t they? Opened at $85, peaked at $142.92. Two days. Two days of pure, unadulterated hype. It was…predictable, really. Like watching a particularly naive pigeon fly directly into a glass door.

The bulls were all over it, naturally. “Disruptive!” they cried. “Challenging Adobe!” (ADBE 0.16%). And for a minute, it looked like they might be right. Figma was growing like a weed, and Adobe, well, Adobe was looking a little…stuck in its ways. But enthusiasm, as anyone who’s ever dated will tell you, is a fleeting thing. And growth slows. And expenses…oh, the expenses.

Now it’s trading just below the IPO price. Thirty-two bucks. A near-80% drop. Is this a buying opportunity? Honestly? That’s what everyone wants to know, isn’t it? Let’s unpack this, shall we? Because I’ve got a feeling it’s going to be messy.

Why All the Fuss About Figma, Anyway?

Okay, let’s give credit where it’s due. Figma is clever. It lets designers build scalable graphics, UI elements – you know, buttons, the stuff that makes apps look vaguely appealing – and even turn static designs into animations. And the plugins? Genius. It’s like giving designers a Swiss Army knife of creativity. They’re building websites, apps, prototypes…the whole shebang.

The real disruption, though, is that it’s cloud-native. Runs in a browser. No installation required. Adobe’s still making people download things, sync files…it feels positively prehistoric. And the collaboration tools? Figma had those before Adobe even realised people liked working together. It’s almost…rude. Like showing up to a party wearing something fabulous while everyone else is still in their pajamas.

They operate a freemium model, which is always a smart move. Get people hooked, then gently suggest they upgrade. In 2024, they had 10,517 customers dropping at least $10,000 a year. 963 spending over $100,000. That’s a good sign. It suggests they were actually pulling people away from Adobe’s subscription model. Or at least, giving them a very tempting alternative. I’ve always said, a good exit strategy is crucial.

Loading widget...

So, What Went Wrong?

The valuation, darling. It reached $60 billion. Sixty billion. Based on what, exactly? Hope and a very enthusiastic marketing team? That’s never sustainable. Especially not in this market. It was a meme stock in disguise, and we all know how those stories end.

Revenue soared 48% in 2024, reaching $749 million. But the gross margin dipped, and they posted a loss of $732 million. A loss! After making a profit the year before. They blamed stock-based compensation, the aborted Adobe acquisition, released RSUs…it sounded like a very expensive breakup. And with interest rates high, investors are less forgiving of red ink. Believe me, I know. I’ve seen a few balance sheets in my time.

The first nine months of 2025 weren’t much better. Revenue up 41%, but the gross margin still dropping. The net loss widened to $1.02 billion. They’re throwing money at AI, new tools…Figma Make, Draw, Sites, Buzz…it’s like they’re trying to solve every problem at once. A little focus wouldn’t hurt, honestly.

What Does the Future Hold?

Okay, there’s some good news. They’re still attracting high-value customers. 12,910 with an ARR of over $10,000. 1,262 spending over $100,000. That’s…encouraging. They’re also making acquisitions, adding features, and even partnered with OpenAI to integrate with ChatGPT. It’s a busy little bee, this Figma.

Net dollar retention is at 131%, up from 129% but down from 134% at the end of 2024. So, things are…stable-ish. Not exactly soaring, but not plummeting either. It’s the kind of performance that makes analysts nod sagely and write vaguely optimistic reports. I’ve seen a few of those, too.

Analysts expect revenue to rise 40% to $1.05 billion in 2025, but the net loss is expected to widen to $1.19 billion. From 2025 to 2027, they predict revenue growth of 21% to $1.53 billion, with the net loss narrowing to $421 million. Sounds…reasonable. If you like reasonable. I prefer a little more excitement, personally.

But here’s the thing. With a market cap of $16 billion, Figma still feels expensive. Twelve times this year’s sales. Adobe, which is larger, growing slower, and actually profitable, trades at five times sales. So, Figma might be worth a nibble as a speculative growth play. But I wouldn’t build a larger position unless the valuation cools and they start showing some actual profit. Because let’s be honest, we all need a little profit in our lives. Don’t we?

Read More

2026-01-15 22:15