Figma Q2 Preview: 40% Growth Looks Great-Why Adobe Still Passes the Smell Test

Figma's growth is real, but the stock now needs more than momentum

Figma's numbers are clearly impressive. The company delivered Q4 revenue of $303.8 million versus $293.15 million expected, and shares rose 20% in extended trading. It then reported Q1 revenue of $333.4 million, up 46% year over year. Management's Q2 guidance of $348 million to $350 million points to roughly 40% growth, a pace that keeps the story alive.

But the setup is different now. After the earlier rerating, investors are less likely to pay for headline growth alone. The harder question is whether AI is meaningfully increasing customer spending, or mainly supporting adoption and seat growth. Figma said Q1 outperformance was driven by stronger seat expansion and adoption of AI products including Figma Make, MCP, and Figma Weave, while management pointed to promising early traction on AI monetization. That is encouraging, but it still looks early.

That is why Adobe still looks like the cleaner option here: a more established cash engine, a broader toolkit, and less pressure for one AI feature set to immediately justify a premium multiple. With the next earnings cycle ahead, Figma now needs tighter proof, not just promise.

Figma still looks like a real product, but the equity case still needs validation

The product clearly has utility

On the surface, Figma still looks like software teams actually use. Its own description says it is where teams turn ideas into digital products in one place, bringing design, code, and collaboration together. That fits the operating data: customers are still expanding and staying engaged.

Figma reported Q1 revenue of $333.4 million, up 46% year over year, and is guiding to $348 million to $350 million for Q2, which implies about 40% growth. That level of growth suggests the customer base is not drifting away.

The stock still needs a very clean execution story

Product strength and stock quality are not the same thing. Figma is still asking investors to underwrite future monetization as much as current demand. In Q4, the company posted a net loss of $226.6 million while growing 40%. In Q1, management said revenue growth accelerated and that non-GAAP operating income guidance was raised, but the business is still being judged on how far ambition can stretch before the market expects more profitability.

The bull case is straightforward: if AI features turn into higher spending per customer, Figma can become more than a design tool. Management said Q1 strength was fueled by organization-wide seat expansion and AI product adoption, alongside promising early traction on AI monetization. That supports the idea that customers are going bigger and broader.

The bear case is just as clear: investors still need proof that AI is expanding wallet size enough to support a premium valuation. That is a tougher ask when the market remains attentive to competitive pressure across software.

The near-term watchpoint is simple: demand looks real, but investors still need cleaner evidence that AI adoption is translating into repeat, incremental spend rather than just more seats. If management can show that, the stock can hold its momentum. If not, strong product usage alone may not be enough.

Adobe offers the same broad theme with a lower bar for proof

The practical question is not whether Figma has a desirable product. It is which setup is easier to own before the next proof cycle. Figma still looks like a tool teams want, and management says growth was helped by sustained seat expansion and AI adoption. But that also means the stock case has less room for disappointment.

The failed deal still says something about strategic value

Adobe and Figma called off their merger because there was no clear path to receive necessary regulatory approvals in the EU and UK. Both companies also said they still believed in the merits of the combination. That suggests the strategic appeal of deeper creative-workflow integration remained intact even after the deal stopped.

From an investor perspective, Adobe still gets exposure to the same creative and digital-experience demand without having to pay Figma's current premium. It is a broader way to participate in the trend, and the valuation thesis does not depend on one product line delivering a near-perfect AI success story.

Why Adobe is the easier hold today

A wider product base usually gives investors more room for error. Figma is one product category and one earnings report away from having to validate the next leg of the story. Adobe is broader, so the burden of proof is less concentrated.

What would support the Adobe case

• Creative-suite demand remains steady, showing the underlying workflow trend still matters even without the acquisition.
• Adobe demonstrates meaningful AI adoption across its broader stack, not just demo-stage progress.
• The setup carries fewer execution surprises than Figma's more tightly framed narrative.

What would weaken it

1. Figma materially demonstrates that AI is lifting customer spending and enterprise adoption enough to justify a still-premium setup.
2. Adobe shows clear weakening in its core product demand.

For now, the cleaner risk/reward still looks like Adobe: the same broad creative-workflow theme, with a lower expectation for immediate perfection.