Figma's Revenue Growth vs. Persistent Losses: Is the Bull Case Still Valid?

Figma’s Q2 2025 earnings report underscored a paradox: explosive revenue growth coexisting with persistent losses and a volatile stock price. The design SaaS leader reported $249.6 million in revenue, a 41% year-over-year increase, driven by a 129% net dollar retention rate and aggressive product launches like Figma Make and Figma Sites [1]. Yet, the company posted a $28.2 million net loss, with breakeven EPS missing analyst forecasts, and its stock plummeted 13.7% in after-hours trading following an early share unlock announcement [2]. This raises a critical question: Is Figma’s bull case still valid, or is its valuation built on speculative optimism rather than sustainable earnings momentum?

Revenue Growth and Product Momentum

Figma’s 41% revenue growth in Q2 2025 outperformed many SaaS peers, with its full-year guidance raised to $1.021–$1.025 billion, reflecting strong demand for design tools and AI integration [1]. The company’s product roadmap—four new tools and two strategic acquisitions (Modyfi and Payload)—has expanded its capabilities into development and AI-driven workflows, positioning it as a one-stop solution for creative teams [1]. However, this momentum is tempered by margin pressures. Figma’s GAAP operating margin of 1% contrasts sharply with its non-GAAP 5%, revealing the cost of scaling AI initiatives and expanding its enterprise footprint [4].

Valuation Metrics: A Tale of Two Stories

Figma’s forward price-to-sales (P/S) ratio of 68.6x [1] is a double-edged sword. On one hand, it reflects investor confidence in its market leadership and 63 Rule of 40 score (growth plus margin), outperforming Adobe (56.5) and Shopify (43.5) [1]. On the other, it dwarfs Adobe’s 6.93x and Shopify’s 18.51x, raising concerns about overvaluation. Analysts estimate Figma’s intrinsic value at $3.91 per share, implying a 1,875% overvaluation [2]. This disconnect is exacerbated by its LTM EBITDA of -$843.11 million and a -94% operating margin [1], metrics that clash with its premium valuation.

Earnings Momentum and Burn Rate

Despite 24% free cash flow margins, Figma’s negative EBITDA and projected gross margin decline to 83% in 2026 highlight the risks of its AI-driven strategy [1]. The company’s burn rate—$28.2 million in Q2—suggests it is prioritizing growth over profitability, a common SaaS playbook but one that demands justification. For context, Canva, Figma’s primary competitor, has maintained profitability since 2017 while scaling to $3.3 billion in annual recurring revenue (ARR) and 240 million monthly active users (MAUs) [3]. Canva’s 12.7x ARR multiple and $42 billion valuation [3] are grounded in consistent profitability, not speculative bets on AI.

Peer Comparison: Canva’s Profitability Edge

Canva’s financials paint a stark contrast. With 20% enterprise revenue and a 66% increase in average contract value (ACV) for Teams, Canva has diversified its revenue streams while maintaining 800 million monthly AI interactions through tools like Magic Write [3]. Its ability to scale AI without eroding margins—unlike Figma’s 83% projected gross margin—underscores a more sustainable model. Applying Figma’s 68.6x P/S to Canva’s $3.3 billion ARR would imply a $205.8 billion valuation [2], but this ignores Canva’s established profitability and enterprise traction.

Is the Bull Case Still Valid?

Figma’s bull case hinges on its ability to monetize AI-driven innovation and maintain its 41% growth rate. Its product launches and 129% NDR demonstrate sticky customer relationships, and the Rule of 40 score suggests a balanced growth-margin trade-off. However, the bear case is equally compelling: a 68.6x P/S ratio is only defensible if Figma transitions to profitability soon. With LTM EBITDA losses and a volatile stock price, the company must prove it can scale AI without sacrificing margins or face a valuation correction.

For investors, the key is to weigh Figma’s product momentum against its financial discipline. While its growth metrics are impressive, the absence of profitability and the looming share unlock risk make its bull case a high-stakes bet. In contrast, Canva’s profitability and enterprise traction offer a more grounded path to long-term value.

Source:
[1] Figma (FIG) Q2 earnings report 2025 [https://www.cnbc.com/2025/09/03/figma-fig-q2-earnings-report-2025.html]
[2] Figma (NYSE:FIG) Stock Valuation, Peer Comparison & [https://simplywall.st/stocks/us/software/nyse-fig/figma/valuation]
[3] Canva's $42 Billion Valuation and AI-Driven Ambitions [https://www.ainvest.com/news/canva-42-billion-valuation-ai-driven-ambitions-assessing-viability-ai-driven-saas-models-high-valuation-landscape-2508]