Figma, Inc. Class A

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Figma Q3 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, Vice President 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 third 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, partnerships, 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 our quarterly report on Form 10-Q for the quarter ended September 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 an 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, which is posted to our website. I would now like to turn the conference call over to Dylan.

Thanks, Kate, and thanks, everyone, for joining Figma's Q3 earnings call today. After the internet, AI is the most important technology shift of our lifetimes so far. I believe it's also an incredible tailwind for Figma, and there are two reasons why. First, AI is uniquely good at code gen and asset creation, which means value is moving up the stack, and like we've said for the last decade, design is the differentiator. Second, as the frontier AI models get better, Figma gets better, and we've built our strategy that way. Q3 was the best quarter in Figma's history. We crossed $1 billion in annual revenue run rate and delivered Q3 revenue of $274 million, a record for sequential net revenue added. This represents 38% year-over-year growth and is above the high end of the guidance that we shared. Our team is working harder, moving faster, and shipping extremely quickly. We're in the lucky position of getting to dog food everything that we're building. This helps us launch products more quickly and with higher quality. Week to week, we're unlocking new capabilities that are resonating with new and existing customers. In Q3, our net dollar retention increased two points to 131%, driven by faster customer adoption of our new products and platform. We were investing to support our product innovation and growth across talent, AI, and M&A. Even with these investments, we continue to generate profits with a non-GAAP operating margin of 12% and an adjusted free cash flow margin of 18% in the quarter. Ending Q3, our balance of cash, cash equivalents, and marketable securities was 1.6 billion. Brands and businesses are quickly realizing that design and craft are increasingly how they stand out and win. Our community is reporting that the design talent wars are fierce. And according to our own research, more non-designers, 56% of those surveyed, are engaged in design-centric tasks. And these same non-designers self-reported that they're spending more time and giving more attention to design-centric tasks than they did a year ago. Today, design can start anywhere with anyone, and it is no longer a linear process. PMs are visualizing their ideas as working prototypes, designers are mapping user journeys with chatbots, and developers are jumping into design details at the beginning of the process rather than just at the end. We are building our platform to meet these changing needs, and it's driving our momentum in a few key ways. Product velocity, platform strategy, and AI investment. First, as I already said, we are building and shipping new features at an extremely fast pace. In Q3 alone, we launched more than 50 new features across every product on our platform. These launches are quickly giving our customers new capabilities and making new workflows possible, helping to spread Figma to new teams within the organization, like brand design and marketing. For example, Intercom, a leading customer service platform, used Figma Buzz to develop hundreds of on-brand visual assets across social, email, and advertising for their annual AI Summit Pioneer. Using templates, designers were freed up to focus on high-impact work, and marketers were able to customize hundreds of assets while maintaining creative integrity. Our second momentum driver is our platform strategy. The ability to go from idea to product, all in Figma, is unique. Our customers appreciate the interoperability of our products. No matter where you start, you can move seamlessly across mediums. In today's workflows, this is not a nice-to-have, it's a requirement. For example, Flipkart, one of India's largest e-commerce platforms with over 500 million users, renewed in Q3. The company uses Figma for brainstorming, designing, and moving to production. This connected workflow helped Flipkart launch Flipkart Minutes, its new quick commerce platform, three times faster than previous launches. Flipkart is one of many amazing customers in India, and we're excited to officially open our India Hub next week. Rivian also uses the entire Figma platform, designed for one of the most complex digital ecosystems in the world, including multiple in-vehicle displays, web and mobile experiences, and autonomous driving. Their unified design system in Figma maintains consistency across every single screen. By standardizing their production files and adopting Code Connect, Rivian's designers and engineers now work in lockstep, reducing thrash and accelerating ship times. Lastly, we're building AI-native workflows across our platform. I'm really excited about our progress here as Figma Make and MCP Server are spreading Figma to new teams and new audiences. Combined with the platform strategy that I already mentioned, we're gaining momentum. During a period where some vibe-coding tools are reportedly seeing slowing growth, Figma Make is speeding up. By the end of September, approximately 30% of customers spending $100,000 or more in ARR were creating in Figma Make on a weekly basis, and that number has continued to grow. We will continue investing heavily in AI, and we will trade near-term margin to build the right long-term platform for our customers. Today, I want to demo a few of these AI-native workflows with Figma Make and Prompt2Edit, and I'll share some of the ways that our customers use them. Let's start with Figma Make, a product that lets anyone turn simple text prompts or existing Figma designs into a workable prototype or even a full web app with the power of AI. We first launched Make in beta earlier this year, and it became available to all users in July. Since our last earnings call, the team has been working incredibly hard to improve Figma Make for our users. One feature we announced recently is the ability to bring your design system into Figma Make. This helps ensure you stay on brand and create outputs that are consistent with your design system. So let's say I'm on the product team at Duolingo, and I want to create a new lesson that allows me to review my previous mistakes. So I've decided to use Figma Make to create that prototype for a rapid-fire this or that exercise. And you can see it here. And press start. You can see how this is a working prototype, but not amazing, definitely not on brand. Something I could show people, but they might judge it by its looks rather than its merits. So how can I get to an equal footing with other prototypes? The design system is an incredible amount of context that has already been created in Figma. This is doing goes, you can see their buttons, their labels, it keeps going. And it's explicitly laid out and very clear how things should work. So now, if I say export library to Figma make, I can use that in order to make it so that I'm able to use that as a make kit. And with a bit of prompting, I can make it just perfect. So you can see as I scroll down, I can even click these buttons and interact with the components. It's all here for me to use. This is an example of us taking that Make Kit and actually using it in Figma Make. You can see that when I click here, I've got Duolingo Make Kit being applied. And now when I click on it, you'll see the imagery and the overall brand and design language of Duolingo. Pretty cool. If I want to, I can also copy this design, and I can bring it into a design file. This is another feature that we recently launched. So one thing I might do here is take some of the objects, and let's say I want to actually go and rotate this a bit. I'll put it behind this card in kind of a playful way. And I'll take this one and do the same. And now I'm going to scale this all. And I'll make this a bit smaller. And I'll move this card back a bit. I'll clip content on this frame. And here I go. So now I've got a design that you can kind of see what the things on the left and right might be, what you last did, as well as what's coming up. If I want to use prompt to edit, I can do that and show you the power of an upcoming feature that we have not launched yet. It's just in private alpha, but we're very excited about. So let's say that I want to go and say, okay, let's give this a fall theme and translate everything from French to Spanish. When I do that, the assistant will get to work. And it's going to hopefully give us some good results. Let's see. All right. So it was able to infer from a fall theme that we should go orange. And it's changed it to Spanish successfully. And we can see that in the design. And if I wanted to go back, I can now go into my overall make prototype. And I can go prompt. and actually copy and paste my design from Figma Design into Make in order to make it so I can update this entire view. And you can see that the design has been copied and its context communicated to Make here as well. So it's very exciting where we can head with this. You can also now use MCP to go pull that context from Make and Figma Design into code in order to go build a prototype or reflect your changes accurately in code as well. All right, now I want to share a couple of the ways customers are using these new products. Take Lowe's, a company that serves a range of consumers, from DIY builders taking on a home remodel to professionals doing large-scale renovations. Designing for these different customers used to be time-consuming and cumbersome, When Lowe's built Milo, their AI chat experience may allow the team to rapidly explore the options space, designing and prototyping interfaces for different scenarios. For example, they prototyped Milo to show a variety of tones, responsives, and flows. Because it's a conversational experience, their design needs to adapt accordingly. And with Figma Make, they can now test and refine design variations in just minutes. This helps Lowe's create world-class AI experiences with the accuracy and the flexibility they need. Or consider Okta, a global leader in digital identity and security. They chose Figma Make as their AI prototyping tool because of its enterprise-grade security and trusted admin controls, and they quickly scaled it across teams. Okta's user research team has become a champion of the product, using Make to test ideas and build interactive prototypes for potential new features. During a recent hackathon, one researcher used Make to prototype a new chat experience in just five minutes, and they were able to test it with customers immediately. We're not only building AI-native workflows directly on our platform, we also invest deeply in partnerships and product integrations. I want to highlight one in particular. Figma app and ChatGPT People are generating a lot of information in chat sessions with LLMs. But what else can you do with that context? One way to use it is to generate a diagram, a flowchart, or a Gantt chart in FigJam. This integration lets you do that inside of ChatGBT and then lets you pop out to Figma's platform to save, share, or further edit. We've seen that this is useful for developers creating system diagrams, researchers mapping out user journeys, or even educators building a flowchart for a lesson plan. This integration is just one example. Over the past quarter alone, we've launched new integrations with Gemini, GitHub, Notion, Linear, Superbase, and many more. Last week, we announced our acquisition of Weavey, which will join our team and platform as Figma Weave. AI has made it easy to create anything, but we believe the first prompt is just a creative starting point, not the final destination. Weevy combines leading AI models with professional editing tools on a single browser-based canvas. The result is an inspiring space for creative exploration. Let me show you. With this powerful yet approachable combination, Weeby gives creatives new ways to channel their craft and their point of view. In less than a year, the Weeby team has built a passionate community from freelancers to Fortune 100 users. The testimonials that we heard from creatives using Weeby completely blew us away. We share the same community focus, maker spirit, and deep love of craft. And together, we have so many ideas for what we can build. We're so excited to welcome them to Figma and plan to grow the team in Tel Aviv and beyond to support this work. Between our product launches, the Weeby acquisition, our integrations, and our AI investments, we accomplished a lot since our last earnings call. And we still have so much opportunity ahead. Zooming out with the explosive growth of software and creative assets, good enough is simply not good enough. It's merely mediocre. You have to push beyond the prompt with design, with craft, and with a bold point of view to build something that truly stands out. Design is the differentiator, how products, brands, and businesses will win. is part of why we brought on Chief Design Officer Loredana Krishan in Q3, who joined us after spending nine years at Meta, most recently leading AI products. Just like our customers, we are also elevating design within Figma. In closing, let me just say, we are so lucky to work with the most innovative companies in the world and with the most creative community on the internet. Building for them motivates us every single day. And with that, I'll pass it to Prabir.