Figma, Inc. Class A

Thank you for standing by. My name is Kate and I will be your conference operator today. At this time, I would like to welcome everyone to Figma Q2 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Kate DiLeo, VP of Investor Relations and Business Operations.

Please go ahead. Good afternoon, and thank you for joining us on today's conference call to discuss Figma's results for the second quarter of 2025. On the call, we have Dylan Field, Figma's co-founder and chief executive officer, and Pravir Malwani, our chief financial officer. During the course of today's call, we may make forward-looking statements, including but not limited to statements regarding our guidance and future financial performance, market demand, product development, growth prospects, business strategies and plans, ability to attract and retain customers, and ability to compete effectively. These forward-looking statements are based on management's current views and assumptions and should not be relied upon as of any subsequent date. And we disclaim any obligation to update any forward-looking statements. Actual results may vary materially from today's statements. Information concerning our risks, uncertainties, and other factors that could cause results to differ from these forward-looking statements are included in our filings with the SEC, including the final prospectus filed in connection with our IPO and our quarterly report on Form 10-Q for the quarter ended June 30, 2025. Our discussion today will include certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute or in isolation from, GAAP measures. Our non-GAAP measures exclude the effect of our GAAP results of stock-based compensation and certain other items. Reconciliations of non-GAAP financial measures to comparable GAAP measures can be found in our press release accompanying this call and which is posted to our website. I'd like to now turn it over to Dylan.

Thanks, Kate. And hi, everybody. Thank you for tuning in today. I want to note that for today's earnings call, we're using one of our products, Figma Slides, which teams around the world use to co-create beautifully designed presentations. Figma Slides should look familiar to anyone who has used a presentation tool before. One feature I want to call out is our grid view feature. This gives you a bird's eye view of the canvas and allows you to organize your presentation in a multiplayer environment. And of course, Figma slides is interoperable with the rest of our platform. If I go back to our main slide view, I can edit or go into design mode. But for right now, I'm going to flip into presentation mode to get us going. So Q2 was a strong quarter for Figma. we achieved $250 million of revenue, a new quarterly revenue record for Figma, representing 41% year over year growth. We also continue to operate profitably with a non-GAAP operating margin of 5% and adjusted free cash flow margin of 24%. With that said, I'm most proud of how our pace of innovation continues to accelerate. Given this is our first earnings report, I want to set clear expectations that we may reevaluate our reporting framework in the future as our business evolves. For example, we might adjust our guidance philosophy or deprecate metrics we no longer believe are reflective of our business. And of course, if we do this, we'll share our rationale with investors. As you all know, we're at the very start of what I hope is a long-term relationship together. Our goal is to be clear and transparent. With that, let's get into it. Today, virtually every business is becoming a software business, and AI has made software easier than ever to create. In this world, we believe your design, your craft, and your brand's point of view is what's going to make your product and your company stand out. Design is now the differentiator. It's how companies win or lose. And our goal at Figma is to build and expand our platform so we can do even more to unleash the taste and craft of our customers who together are shaping and defining this next era of digital products. This goal is what guides our team, it guides our roadmap, and it guides our investment philosophy. It's also what motivates me as I think about the years and the decades ahead of how we can expand our platform. We're focused on building a durable long-term business that serves the evolving needs of designers and product development teams. Our focus drives our capital allocation decisions at Figma. For example, you should expect to see significant investments in our AI efforts because we believe AI will be critical to how software development workflows evolve moving forward. This means that we expect margins to come down in the near term as we invest in the long term. And as I wrote in my S1 founder letter, we do plan to take big swings if and when we see opportunities to invest, both organically and inorganically. We know this approach won't resonate with everyone, but we believe we have a massive opportunity in front of us and we intend to capture it. Figma is where teams come together to turn ideas into the world's best digital products and experiences. What started as a design tool when we launched our closed beta back in 2015 has now grown into something much bigger, a single connected AI-powered platform that serves the entire product development process. We serve a deeply engaged global community of designers and product builders. They're passionate about their craft and they inspire us to think bigger every day, which brings me to Q2. This May, we brought nearly 10,000 members of our global community together in San Francisco for our annual Config conference. Hundreds of thousands of users also tuned in to watch virtually. And then the next week, we hosted thousands more in person at Config London. At Config, we launched four new products, doubling our product offering. These products are Figma Make, Figma Draw, Figma Sites, and Figma Buzz. We also launched our dev mode MCP server, which speeds up developer workflows by bringing context from Figma design into any surface that consumes MCP. For example, IDs like VS Code and Cursor. In Q2, we also made two exciting acquisitions, a company called Modify to support our work around visual expression and Payload, an open source company with a strong developer community that offers a leading headless content management system and application framework. Now I'll go into more detail on each of the four products that we launched at Config. First up, Figma Make. Figma Make is our new prompt to code product that allows you to use an existing Figma design or natural language to create a fully functional prototype. You can also build working apps and publish them directly to the web. Teams tell us that the speed of going from an idea to a working app is a game changer. Figma Make gives anyone the power to visualize an idea in high fidelity and validate a concept with something realistic. And in some cases, their creation can even be the real final product. This is important because so much of what has made product building a challenge is slow cycle times and not having a way to explore the full option space of your ideas. Now you can do this more quickly and sometimes really quickly in a matter of minutes with Figma Make. So let me show you how it works. This is Figma Make. On the bottom left, you'll notice a chat box where you can type in a prompt to generate a full dynamic web app. Now you may have seen other AI vibe coding tools like this, and perhaps you're wondering, what makes Figma Make different? Figma Make's superpower is the design context it can tap into to create higher quality outputs, even if you're not a designer yourself. Let's say I'm a product manager on a team building a fitness app. I have all these amazing designs that my designers have mocked up, and they look great, but maybe I want to get a better sense of how the app actually works from the end user's point of view. This is where having a prototype that I can play with can help validate my direction. Rather than asking a designer to wire one up, I can just ask Figma Make. All I have to do is copy this from Figma Design into Figma Make, pasting in, and with that, all the design context and the metadata that is in Figma design is now in Figma Make. So let me add a prompt in the chat box to bring it a bit more context. I'll ask Make to make this a fully interactive dashboard that matches this design one-to-one. Allow me to hover over the chart to see data and filter by time range. One thing we've heard from customers is that they want the outputs they generate to look and feel consistent with their other products. With Figma Make, you can connect to your design library and bring in style context like color palettes and other core styling elements. This is an area we're investing a lot of time in. There's even more improvements to come. All right, so now we're ready. We'll click here, and Figma Make, as you can see, is starting to interpret the prompt, the designs we provided, and even starting to write the code that'll turn them into functional prototypes. You can see it begin to work. This will take a couple of minutes, so in the interest of time, let's take a look at a finished example. Here, you can see the working prototype that we got from the design, and just a single, simple, natural language prompt. And you can see it's fully interactive as I move my mouse around my cursor and actually see the hover effects or toggle between these tabs. And I want to make changes to generate output. I can simply prompt again. I can also easily refine my results by clicking here in order to select part of the prototype. For example, this new reminder button. And as I do that, I have the ability changes color to something else should I want to, and easily directly manipulate the output. Voila, there we go. With Make, you can also edit, download, or export the actual code behind the prototype. Figma Make also allows for multiplayer editing, so I can collaborate with my team in this code view, and anyone in the file can also prompt their own changes alongside me. Okay, now I have a working prototype for my fitness app that I can preview across screen sizes, share directly with my team for feedback, test with users, or if I feel it's ready, publish directly to the web. This is still early days for Figma Make, and we're working hard to rapidly improve it. The response we've seen from users so far has just been amazing, and we're so energized for what's next. For example, Affirm is using Figma Make to help visualize and validate their ideas faster. Rather than writing detailed PRDs, product managers at Affirm use Make to create prototypes that everyone can interact with. This helps them work through their ideas faster. Designers use Make at Affirm as a thought partner when they want to work through multiple concepts, such as a user interaction pattern. Affirm's PMs, engineers, and designers also use our dev mode MCP server. And they've told us it speeds up their development velocity by quote, orders of magnitude. One designer was able to rebuild major product flows in less than two days. Affirm also recently upgraded to an enterprise account. From building with Make to brand marketing in Figma Buzz to executive reviews with Figma Slides, Affirm uses the Figma platform company-wide. Switching gears from Make, for some time now, our users have asked us to improve Figma's vector functionality. In this age of AI, where software is created faster than ever, it's an especially important moment for us to give our customers ways to be even more expressive on the Figma platform. We want to help our customers differentiate their product and their brand. They need to stand out from the crowd. So at Config, we launched Figma Draw, a set of tools optimized for visual design and freeform creation in Figma. Draw is part of our full seat, and it became generally available in Q2. Let me hop into a quick demo so you can see how it works. To use Figma Draw, all you need to do is go into a Figma design file and click this toggle. Okay, now I'm in Figma Draw. Draw offers 20 plus new tools like textures, effects, and improved vector editing. But the real power of Figma Draw is the ability to bring more creativity and visual expression to your designs. I'm just gonna show you a few of the features. You'll have to look at the rest yourself. I'll start with a sun illustration. It's a good start, but we can do more to bring this to life. One way to do it is with our Repeaters feature. If I click here, you can see that as I move my mouse around, I can easily add more rays. And also, if I click the Brush feature, then I can give a bit more texture with different brushstrokes. I'll choose the noir one right here. What's also great about Figma Draw is you can use your existing design system In that way, you're able to keep your illustrations on brand and avoid repetitive work. For example, I've already defined a color palette here that works across a light mode and a dark mode of my app. So what I can do is I can take my component here and I can copy and paste it into this new frame. When I do that, you'll notice that the colors update on this hand and basically the ground below the grass from black to white. that way I don't have to go select those colors again from the start. Our community has made some incredible things with Draw. And it's been amazing just to watch their creativity flourish. And some of them made things that we honestly didn't even think were possible. One example is from a community member, Erica Leung, a visual designer based in Canada. Erica uses Figma Draw in her role at a product and design agency, as well as her freelance work. She can work and draw to riff on an illustration and then flip to Figma design to do product design work, all without leaving the Figma platform. And Inge Hampton, a brand designer and illustrator, is pushing the boundaries of illustration in Figma, as you can see here. If I hover over her design and the different layers, you can see how complex her illustration is. She has layers representing freckles, interesting masking groups. It's quite impressive to see how these files are created. And of course, this is just a peek into what you can create with Figma Draw. Our community is always just so amazing in how they push our tools to the limit. And we're always excited to see where they take Figma next. All right, let's move on to Figma sites. For years, our community and customers have had a simple request for us. They say, if we design in Figma, why can't I just press the publish button and go directly to the web? Well, now with Figma sites, users can do that. They can create beautifully designed dynamic websites with custom code interactions powered by AI. We also offer animations, responsive layouts, and more. When it's time to ship, you can just hit that publish button and just like that, you've got a live working website. You can even connect it to your own custom domain if you want to. We're very excited about what our users will be able to do with not just Figma sites, but also our CMS offering that we have under development. And finally, we announced Figma Buzz at Config. Buzz helps brand and marketing teams build assets at scale using their design teams libraries and brand graphics in Figma. When using Buzz, creatives and marketers can quickly customize everything from social media assets to event materials, you name it, at high volume with consistency. While sites in Buzz are still in beta, we're thrilled by the responses that we've seen so far from the community. Our users can now go from design to build all the way to shipping a product or brand assets, all in Figma. And lastly, we continue to serve the evolving needs of developers who accounted for approximately 30% of our monthly active users during Q2. In Q2, we launched our DevMode MCP server. With DevMode MCP, developers can connect the design context in Figma to their AI coding tools. And with that, they can generate the base implementation of their front end at lightning speed. The combination of design context plus code-based context helps produce better code output from LLMs tailored to the user's designs. And it's been so exciting to hear how our customers are using this. One customer example here is Coinbase, who serves users in more than 100 countries. Coinbase has been a Figma customer since 2018, and they've grown from just a few users, I remember when I went there and demoed in the first place, to hundreds of designers, developers, product managers, marketers, and more, building multiple products from start to finish, all in Figma. And Coinbase ships fast. AI coding tools have helped, and by implementing Figma's dev mode MCP server, Coinbase can make sure that LM-generated code is design informed. This means they can move quickly, but without sacrificing their brand or system integrity. Coinbase has seen encouraging early results with improved developer velocity, greater parity between design and development, and a consistent user experience across their platform of products. From the start, we've taken so much inspiration from Figma users and customers around the world. And of course, we're super focused on how we can keep meeting their needs. In Q2, we continued to make our product more accessible to customers outside the United States. In April, we localized our product and support for Korean language users. And then shortly afterwards in May, we made our product and support available in Brazilian Portuguese. We've seen this resonate with customers, including Itaú, Unibanco, and Nubank in the LATAM region. Itaú is Latin America's largest private bank. With Figma's AI-powered platform, they've accelerated their product development process and the way teams work together across the company. Itaewoo uses Figma to go from ideation to prototyping all the way to code and delivery, elevating the quality of their experiences that they deliver to customers. NewBank is a fintech company that uses Figma Enterprise and serves more than 118 million customers. Figma's platform is where everyone works together in one space, including hundreds of designers, researchers, engineers, and PMs. Figma has helped new banks scale their products with consistency and speed as they've grown across North and South America. As I look ahead, I'm just so excited about the opportunity in front of us. The role of design and craft and the importance of building great user experiences has never been more critical. And this is especially true in a world where AI makes it easier than ever to build software. In this world, design is more essential and it's more powerful. Design is how companies win or lose. It is the critical differentiator. I want to thank our customers for their trust, our community for their energy and ideas, and the entire Figma team for their hard work and incredible execution. We have so much more to build together, and I'm so looking forward to the future. With that, I'll hand it over to our CFO, Praveer.