Figma projects strong annual revenue, boosting shares

• Q4 revenue reached $303.8 million, surpassing estimates of $293.2 million, with adjusted earnings of 8 cents per share
• First-quarter 2026 revenue guidance of $315-$317 million significantly exceeds analyst expectations of $291.9 million
• Fourth-quarter operating expenses nearly tripled, largely due to accelerated stock-based compensation calculations following the company's July IPO

Summary: Figma Projects Strong Annual Revenue, Boosting Shares

Key Financial Projections:

Design software maker Figma issued strong revenue guidance on February 18, significantly exceeding Wall Street expectations. The company projects 2026 annual revenue of $1.36-$1.37 billion versus analyst estimates of $1.29 billion. First-quarter revenue is expected at $315-$317 million, well above the $291.9 million consensus.

Q4 Performance:

Fourth-quarter revenue reached $303.8 million, beating estimates of $293.2 million. The company posted adjusted earnings of 8 cents per share. However, operating expenses nearly tripled during the quarter, attributed to stock-based compensation calculation methods following the company's July 2025 IPO.

Strategic Focus:

Figma is leveraging generative AI as a competitive differentiator against industry leader Adobe. CFO Praveer Melwani emphasized that improvements in AI technology directly enhance Figma's platform capabilities, allowing users to "explore ideas much more quickly" on its design canvas. The company is also pursuing acquisitions to strengthen its product portfolio and expand its user base.

Market Position:

Operating in a crowded design software market dominated by Adobe, Figma is betting on AI innovation and strategic growth initiatives to drive demand. The company's blockbuster public debut in July 2025 positioned it for continued expansion.

Market Implications:

The better-than-expected guidance and Q4 results sent Figma shares higher, signaling investor confidence in the company's growth trajectory and AI-driven strategy. The strong projections suggest robust demand for design software and successful execution of the company's competitive positioning against established players.