Figma's stock slumps 18% after first earnings report to lowest since IPO

Figma's shares experienced a sharp decline of nearly 20% on Thursday, hitting their lowest point since the company's initial public offering (IPO) in July. This downturn followed the release of their first earnings report as a publicly traded entity. The second-quarter results were largely in line with market expectations, as Figma had previously shared preliminary figures just over a month ago. The company's revenue saw a significant increase of 41% year-over-year, reaching $249.6 million, slightly surpassing analyst forecasts of $248.8 million, according to LSEG data. Analysts from Piper Sandler characterized the earnings report as "largely a non-event," yet acknowledged the extreme volatility of the stock, especially following an astonishing 250% increase on its debut. Since closing at $115.50 on its first trading day, Figma's stock has depreciated by more than 50%, resulting in a market capitalization of approximately $27 billion. Looking ahead, Figma anticipates revenues for the third quarter to be between $263 million and $265 million, which would indicate a growth rate of around 33% at the midpoint of that range. The consensus estimate from LSEG stands at $256.8 million. Figma's IPO was a notable event for Silicon Valley and the technology sector, marking one of the most high-profile offerings in recent years. It indicated a renewed interest from Wall Street in growth-oriented businesses, particularly following a prolonged downturn that began in early 2022 due to rising inflation and interest rates. In terms of customer retention, Figma reported a net retention rate of 129%, although this figure was a slight decrease from 132% in the previous quarter.