TLDR
- Figma plunges 13.7% after earnings despite record $249.6M revenue
- Lock-up expiry spooks investors, Figma stock drops after strong Q2
- Figma Q2 revenue jumps 41%, but shares fall on employee sell-off fears
- AI push & new tools fuel growth, yet stock sinks amid lock-up release
- Strong fundamentals, shaky sentiment: Figma stock tumbles post-earnings
Figma shares fell sharply in after-hours trading, dropping 13.77% to $58.75 after closing at $68.13.
The decline followed the company’s second-quarter 2025 earnings announcement, despite reporting a 41% revenue increase. Figma posted $249.6 million in revenue, its highest quarterly total to date.
The market reaction came after a strong trading day and may signal concerns beyond headline financials. The company also noted a modest 1% GAAP operating margin, though non-GAAP metrics showed a healthier 5%. Figma’s net income stood at $28.2 million, with $62.5 million in operating cash flow for the quarter.
Even with this financial strength, market sentiment turned negative amid news of partial lock-up expirations. Shareholders reacted swiftly as 25% of employee-held shares became eligible for sale following the earnings release. The drop reflects unease over potential dilution despite long-term indicators of platform growth and expansion.
Product Innovation and AI Focus Drive Revenue
Figma credited its revenue growth to strong customer demand and multiple product launches. During the quarter, the company introduced four new tools: Figma Make, Figma Draw, Figma Sites, and Figma Buzz. These tools expanded Figma’s platform reach, targeting design, prototyping, publishing, and marketing workflows.
Figma released its Dev Mode MCP server, aiming to streamline developer operations through design-to-code integrations. Over 80% of customers used two or more products, and nearly two-thirds used three or more. This increased engagement helped lift Figma’s Net Dollar Retention Rate to 129%.
Figma emphasized continued investment in AI as a critical driver of platform differentiation and user efficiency. The firm also closed two acquisitions—Modyfi and Payload—to extend capabilities in motion design and headless CMS. These moves support Figma’s long-term roadmap for design system unification and backend flexibility.
Lock-Up Expiry Triggers Selling Concerns
The stock drop aligned closely with the anticipated early release of locked-up employee shares. Figma confirmed that conditions for early release were met and that select shares would become tradeable on September 5. This includes 25% of eligible shares held by certain employees, not including top executives.
A separate extended lock-up agreement signed on August 30 includes phased releases through August 2026. Up to 17.5% of Class A shares held by major stakeholders will be released after Q3 earnings. Further tranches will become eligible for sale following subsequent quarterly and annual results.
While these agreements aim to maintain market stability, they also introduce predictable selling windows. Figma’s share price may continue to respond to these future unlocking events. However, strong fundamentals and revenue growth could counterbalance short-term volatility as the company scales.
