Figma's Stock Plummets 3.9% as Record Revenue Fails to Stabilize Volatility Trading Volume Surges to 203rd in U.S.

Market Snapshot

Figma (FIG) closed at $44.01 on November 5, 2025, a decline of 3.93% for the day, marking one of its most significant single-day drops since its July IPO. Despite the post-market rebound, the stock remains 69% below its 52-week high of $142.92. Trading volume surged by 69.21% to $610 million, ranking 203rd in daily volume among U.S. equities. The price action reflects mixed sentiment: while the company reported record quarterly revenue and raised full-year guidance, the lock-up expiration on November 7 looms as a near-term catalyst for potential volatility.

Key Drivers

Figma’s third-quarter results underscored its AI-driven growth strategy and operational momentum. The company reported revenue of $274.2 million, a 38% year-over-year increase and $10.22 million above estimates. This outperformance was fueled by strong adoption of AI-powered tools like Figma Make, which saw 30% of customers with over $100,000 in annual recurring revenue (ARR) using it weekly by September. CEO Dylan Field highlighted the platform’s expansion into cross-functional workflows, noting that non-design roles such as product managers and researchers are increasingly leveraging Figma’s tools. The non-GAAP operating margin of 12% and adjusted earnings of $0.10 per share further reinforced the company’s path to profitability, even as a GAAP net loss of $1.1 billion—driven by one-time IPO-related expenses—clouded short-term optics.

The raised full-year revenue guidance to $1.044–$1.046 billion (up from $1.021–$1.025 billion) signals confidence in sustaining its growth trajectory. This optimism is tied to Figma’s ecosystem expansion, including the acquisition of Weavy (now Figma Weave) to integrate AI-native design capabilities and a partnership with OpenAI to embed ChatGPT into its platform. These moves aim to broaden Figma’s appeal beyond design teams, positioning it as a multi-product suite for enterprise software development. However, the stock’s 60% decline since its July IPO—despite these operational milestones—reflects market skepticism about valuation and execution risks. Analysts have noted the disconnect between Figma’s long-term growth story and its current price-to-sales multiples, which remain elevated relative to peers.

Near-term volatility is anticipated as a lock-up expiration on November 7 allows early employees and investors to sell shares for the first time since the IPO. This event could exacerbate supply pressures, particularly given the stock’s already weak technical indicators: it closed below its 200-day moving average and the 52-week range ($43.90–$142.90) suggests a bearish trend. While management’s post-earnings call emphasized progress in enterprise AI adoption and multi-product expansion, the market’s focus on GAAP losses and near-term liquidity risks may overshadow these positives in the short term.

Competitive dynamics also weigh on Figma’s outlook. The terminated Adobe-Figma merger in 2023 has left the company as an independent player in a market dominated by Adobe’s Creative Cloud, which remains a formidable competitor in design software. Although Figma’s browser-based model and AI integration differentiate it, its ability to monetize these advantages at scale remains unproven. The net dollar retention rate of 131% for high-ARR customers (up from 129% in the prior quarter) is encouraging but must be sustained to justify its valuation. Investors will closely watch Q4 performance and the cadence of new product launches to assess whether Figma can maintain its momentum in a competitive and capital-intensive sector.

The earnings report also highlighted structural challenges. The one-time $975.7 million stock-based compensation expense, tied to the IPO, skewed GAAP results but was offset by strong non-GAAP metrics. This duality—between GAAP losses and non-GAAP profitability—has created a narrative divide among investors. While bulls point to the company’s cash reserves ($1.6 billion as of September 30) and improved operating margins, bears argue that the GAAP loss signals ongoing inefficiencies. The market’s reaction to the lock-up expiration and the post-earnings call will likely determine whether Figma’s stock stabilizes or continues its downward trajectory.

In summary, Figma’s Q3 performance reflects a company in transition: it has demonstrated robust revenue growth and AI-driven product innovation but faces near-term headwinds from liquidity events and competitive pressures. The coming weeks will be critical in determining whether the market re-evaluates its long-term potential or discounts its valuation further amid execution risks.