Bull vs Bear Case for Figma After Q1 Earnings

That wraps up our initial coverage of Figma’s Q1 results. Thank you for stopping by!

Check out management’s earnings call tonight for more updates.

Figma received an “A” grade for its Q1 earnings report tonight. Here’s what the scorecard looks like:

Overall Grade: A

A clean beat-and-raise across revenue, EPS, and FY26 guidance, validating the AI seat-expansion thesis.

Shares trade at $20.24, still down 49.32% YTD. The tone on tonight’s call will help determine whether the rerate toward $40.25 holds.

With Q1 in the books, now investors will be watching the company’s earnings call at 5 PM EST for hints of further guidance.

Bullish Scenario

• Sustained net dollar retention near 139% and continued AI seat expansion.
• Operating margin commentary supporting a credible path to GAAP profitability.

Bearish Scenario

• Soft full-year commentary or vague AI revenue attribution.
• Gross margin slips below 84.76%.

Wall Street’s average price target of $40.25 assumes guidance holds. Management’s tone on the call will help decide whether shares rerate toward that number.

Figma reported strong Q1 results, beating expectations across revenue, earnings, and guidance as AI adoption and enterprise expansion accelerated. The stock immediately jumped about 9% following results.

Key highlights:

• Revenue grew 46% YoY to $333.4M, above the $313.2M consensus
• Adjusted EPS came in at $0.10 vs. $0.06 expected
• Net dollar retention hit 139%
• Free cash flow reached $88.6M with a 27% margin
• Customers spending over $100K ARR grew 48% YoY

Management said the quarter was driven by stronger-than-expected “seat expansion across entire organizations” alongside growing adoption of Figma’s AI products.

Figma also raised FY26 guidance:

• Revenue now expected at $1.422B-$1.428B vs. $1.36B consensus
• Q2 revenue guidance of $348M-$350M also came in ahead of expectations

With Figma (NYSE:FIG) up 6.86% into tonight’s after-close report, here are some questions to watch out for on tonight’s call:

Top 5 Analyst Questions

• How is AI driving paid seat expansion after Q4’s 40% YoY revenue growth?
• Will operating margins compress further given AI infrastructure spend?
• How is Figma responding to Google’s Nano Banana 2 pricing pressure?
• Path to GAAP profitability in fiscal 2026?
• Update on the Lowey Dannenberg securities investigation?

Key Topics for Management

• Net revenue retention and enterprise seat trends
• Quantifying AI feature attach rates
• Guidance reset versus the $40.25 consensus target

Red Flags

• Soft Q2 guidance
• Gross margin slip below 84.76%
• Vague AI revenue contribution
• Commentary on heightened churn after the January 27, 2026 lock-up expiration

Tonight’s earnings marks the first earnings report since the lock-up expiration flood, and management now has its first real opportunity to reset the story with the stock trading near $20 per share.

Despite the recent pressure, Wall Street’s consensus price target still sits at $40.25, implying more than 100% upside from current levels. The stock is also up 6% today, ahead of earnings.

The key question is whether management can reconnect investors to the long-term AI growth narrative. If CEO Dylan Field and CFO Yuhki Yamashita can quantify how AI demand is translating into revenue growth while maintaining confidence in the broader outlook, sentiment could shift quickly from post-lock-up selling pressure toward fundamentals again.