Figma Inc. saw its shares spike 13.24% on Friday, closing at $22.92, after the design software company delivered strong first-quarter results and lifted its full-year revenue forecast. The stock edged down 1.57% to $22.56 in after-hours trading, but the weekly gain still stands at roughly 11% from the May 8 close of $20.66.
The rally came on the back of a quarterly report that showed revenue of $333.4 million, a 46% year-over-year increase. The company also reported non-GAAP operating income of $52.1 million. Figma raised its full-year revenue guidance by $55 million, now expecting between $1.422 billion and $1.428 billion.
CEO Dylan Field attributed the momentum to artificial intelligence, stating, "When code is a commodity, design is the competitive edge." CFO Praveer Melwani noted that the improved outlook reflects "promising early traction on AI monetization." Figma began implementing AI credit limits on March 18, and the company reported that over 75% of higher-tier users who exceeded those limits in April continued purchasing credits. As of April 30, more than 95% of those users remained active on the platform.
Other key metrics also impressed investors. Net dollar retention hit 139%, its best level in over two years. Paid customers rose 54% to roughly 690,000, while the number of clients generating over $100,000 in annual recurring revenue increased 48%.
Despite the upbeat news, the company reported a GAAP net loss of $142.4 million, compared to net income of $44.9 million a year ago. Stock-based compensation reached approximately $169.0 million for the quarter. Higher AI usage can also drive up infrastructure costs before pricing adjustments take full effect.
Analysts responded cautiously. Piper Sandler's Billy Fitzsimmons maintained an overweight rating but cut his price target to $30 from $35. JPMorgan's Mark Murphy lowered his target to $42 from $45, keeping a neutral rating. Morgan Stanley also reduced its target to $38 from $44, sticking with an equal-weight view.
Broader market conditions could weigh on Figma's stock Monday. U.S. equities closed lower Friday, with the Dow down 1.07%, the S&P 500 off 1.24%, and the Nasdaq falling 1.54%, as crude oil and Treasury yields climbed. "There's a realization that the market had gotten way ahead of itself," said Kenny Polcari, chief market strategist at Slatestone Wealth.
Competition remains a factor. Adobe continues to dominate the design software space, and both companies are integrating AI into their tools. Anthropic launched Claude Design in April, a test product that generates prototypes, slides, and visuals from prompts. CFO Melwani acknowledged the threat, telling Reuters, "You can't dismiss them," while noting Figma is monitoring Anthropic's model training and product connections.
The key question for investors is whether Friday's surge marks a turning point after a prolonged decline, or merely a short-term bounce in a stock that remains well below its 52-week high of $142.92. With AI monetization showing early promise but costs rising, the market will be watching Monday's session closely.
