By Zaheer Kachwala (Reuters) -Figma raised its annual revenue forecast on Wednesday, banking on the collaborative design software provider’s efforts to expand its product line-up and grow its user base. Shares of the company were up around 2.5% in extended trading. In a crowded market, the company has emphasized its browser-based model, as well as […]
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Figma raises annual revenue forecast on strong design software demand
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By Zaheer Kachwala
(Reuters) -Figma raised its annual revenue forecast on Wednesday, banking on the collaborative design software provider’s efforts to expand its product line-up and grow its user base.
Shares of the company were up around 2.5% in extended trading.
In a crowded market, the company has emphasized its browser-based model, as well as its artificial intelligence tools to reel in users across diverse segments, including advertisers, freelancers and global corporations.
In July, the company launched Figma Make – an AI-powered product that turns a written prompt into a functional prototype – as part of efforts to embed the booming technology into its products.
Figma has also partnered with OpenAI to integrate its app into ChatGPT, allowing users to create designs based on conversation with the chatbot, potentially opening Figma’s products to millions.
Figma’s Chief Financial Officer, Praveer Melwani, told Reuters that the company was facing some near-term margin compression as it invests to create new products, but expects that pressure to ease as it begins to monetize more tools.
Figma expects fourth-quarter adjusted free cash flow margin to decline sequentially due to the continued AI investments and some one-time tax payments, executives said on a post-earnings conference.
The company now expects revenue of $1.044 billion to $1.046 billion for fiscal 2025, compared with its prior forecast of between $1.021 billion and $1.025 billion.
For the fourth quarter, the company expects revenue of between $292 million and $294 million, compared with estimates of $282.9 million, according to data compiled by LSEG.
Its third-quarter revenue of $274.2 million beat estimates of $265.2 million.
It reported a net loss of $1.1 billion, compared with a loss of $15.6 million in the same period a year earlier, due to one-time stock-based compensation expense related to its initial public offering.
The company’s shares have fallen more than 60% through Tuesday close since their blockbuster listing in July.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila)