Figma Boosts Q4 Revenue Outlook to $292M-$294M on AI Product Growth

Figma's Record Performance in Q3 2025

Figma, Inc. (FIG) delivered a standout performance in the third quarter of 2025, marking what CEO Dylan Field described as "the best quarter in Figma's history." The company reported a revenue of $274 million for the quarter, reflecting a 38% year-over-year growth and surpassing previous guidance. This achievement comes with an annualized revenue run rate exceeding $1 billion, showcasing the company's strong financial momentum.

Field emphasized that AI is "the most important technology shift of our lifetimes so far," highlighting the rapid adoption of AI-native workflows within Figma's ecosystem. By the end of September, approximately 30% of customers spending $100,000 or more in annual recurring revenue (ARR) were using Figma Make on a weekly basis, with this number continuing to grow. This trend underscores the increasing reliance on AI-driven tools among Figma's enterprise clients.

The company also made strategic moves, including its first acquisition of Weavy and the opening of a new hub in India. These developments signal Figma's commitment to geographic expansion and enhancing its product offerings. Additionally, the hiring of Loredana Crisan as Chief Design Officer from Meta further strengthens Figma's design capabilities, positioning the company to lead in the evolving design landscape.

Financial Highlights and Outlook

Chief Financial Officer Praveer Melwani provided detailed insights into Figma's financial results, noting that the company ended Q3 with $274 million in revenue, representing 38% year-over-year growth. The annualized revenue run rate surpassed $1 billion, and the company raised its outlook for both Q4 and the full fiscal year. For Q4, revenue is expected to be between $292 million and $294 million, indicating a 35% year-over-year growth at the midpoint. Full-year revenue is forecasted to range between $1.044 billion and $1.046 billion, an increase of $22 million compared to the prior guidance.

Melwani also highlighted that full-year operating income is expected to fall between $112 million and $117 million. However, he clarified that the outlook does not assume consumption revenue to be material this year and expects Q4 adjusted free cash flow margin to decline sequentially due to continued AI investments and some one-time tax payments.

Financial results for Q3 included a gross profit of $237 million with a gross margin of 86%. Non-GAAP operating income was $34 million, with an operating margin of 12%. Adjusted free cash flow was $49 million, representing an adjusted free cash flow margin of 18%. The company ended the quarter with $1.6 billion in cash, cash equivalents, and marketable securities.

Figma also reported an increase in total paid customers, reaching 540,000, up from nearly 450,000 at the end of Q1. Net dollar retention for paid customers with ARR of $10,000 or more reached 131%, up 2 percentage points from Q2. However, a large one-time stock-based compensation expense related to the go-public process resulted in a GAAP net loss in Q3, with normalization expected over several quarters.

Strategic Focus and Future Directions

During the earnings call, management discussed the strategic focus on AI-native workflows, with the general availability of Figma Make and the launch of more than 50 new features in Q3. The company's shift toward AI-driven products has been accompanied by increased customer adoption, with 70% of customers using three or more products, up from two-thirds in Q2.

Analysts expressed positive sentiment, congratulating management on the strong quarter and highlighting the company's product launches and growth. Questions were largely constructive, focusing on product strategy and adoption trends. Management maintained a confident and optimistic tone, emphasizing the momentum from new product launches, strong customer metrics, and raised guidance.

Compared to Q2, both management and analysts exhibited increased confidence, with more focus on AI-driven growth and expanded platform capabilities. The company's strategic moves, including the acquisition of Weavy and the opening of the India hub, reflect its commitment to innovation and global expansion.

Risks and Challenges

Despite the positive performance, management acknowledged potential risks, including the impact of AI investments on gross margins. Melwani noted that the cost to serve these products and features has affected gross margin, with further margin pressure expected as AI adoption scales. He also mentioned that the company is not enforcing credit limits on full seats or charging for a consumption add-on, but when it does, it will offset some of the incremental inference spend.

Melwani cautioned that Q4 adjusted free cash flow margin is expected to decline sequentially due to continued AI investments and some one-time tax payments. Additionally, the large one-time stock-based compensation expense related to the go-public process resulted in a GAAP net loss in Q3, with normalization expected over several quarters.

Final Takeaway

Figma's Q3 2025 results highlight robust revenue growth, strong customer adoption of AI-native products, and a raised outlook for both Q4 and the full fiscal year. The company is investing heavily in AI, platform expansion, and product innovation while maintaining profitability and a strong cash position, positioning itself for continued momentum into 2026.