Figma's gross margin fell from 92.4% to 83.7% as it gives away AI agents; Nov. 4 shows if customers pay
CFO Praveer Melwani says Figma will keep eating AI inference costs even if gross margin never returns to the low 90s, and the stock is down about 43% this year [1]. The third-quarter report on November 4 [8] is the first count of what the giveaway bought.
Vincent Jiang · 3 min read
On October 15 in Bengaluru, Figma's−6.61% — Figma, down 6.61 percent today finance chief Praveer Melwani put the company's whole bet into one exchange. Asked at the Reuters Global Markets Forum whether gross margin ever returns to the low-90% range Figma once earned, he said: "I don't know. But is that the thing I would be acutely focused on? No." 1 He would "take the hit on margin" again, he said, to serve a much larger market. 1 Figma has, in effect, turned its gross margin into a marketing budget.
The agents are free, and most users are not designers
The stage was Config India, Figma's first conference in the country. A week earlier it had rolled its AI design agent out to all customers globally. 2 At the event it opened code layers, code-backed prototypes that run on the canvas, in open beta, shipped Specs, a markdown editor for briefing teams and agents, and added 20 partners, including Indian AI startup Sarvam, to its Model Context Protocol network, which lets outside coding agents read and edit Figma files. 2
Most of the people this serves do not hold a paid design seat. About two-thirds of Figma's monthly active users describe themselves as something other than a designer, and India, its second-largest user market, counts more than 40% of the BSE 100, the index of India's 100 largest listed companies, as customers. 3 Chief executive Dylan Field says those customers "prefer working together with their teams on the canvas". 2
The margin was already spent
The giveaway extends a slide already in the filings. Gross margin peaked at 92.4% in the December 2024 quarter and ran at 83.7% in the June 2026 quarter, even as revenue grew 48% year over year to $370 million. 45
Figma's gross margin has slid from the low 90s to the mid 80s as AI spend ramped
Data
| Gross margin | |
|---|---|
| Q3 '24 | 90.6% |
| Q4 '24 | 92.4% |
| Q1 '25 | 91.5% |
| Q2 '25 | 88.8% |
| Q3 '25 | 69.4% |
| Q4 '25 | 82.1% |
| Q1 '26 | 79.4% |
| Q2 '26 | 83.7% |
Revenue grew every quarter, reaching $370 million in June, up 48% year over year
Data
| Revenue | |
|---|---|
| Q3 '24 | $199M |
| Q4 '24 | $217M |
| Q1 '25 | $228M |
| Q2 '25 | $250M |
| Q3 '25 | $274M |
| Q4 '25 | $304M |
| Q1 '26 | $333M |
| Q2 '26 | $370M |
On the August 5 earnings call, Melwani said the quiet part out loud: products in beta, which then included the agent, carry no charge, and Figma "bear[s] the cost of inference without offsetting consumption revenue". 5 The company raised full-year revenue guidance by $40 million while holding operating income guidance at $125 million to $135 million, arithmetic that spends every incremental dollar. 5
A 15% slide, and the downgrades spread
The shares slid more than 15% the morning after that report, on research spending up 101.5%, and Reuters puts the stock down about 43% this year. 61 The week of October 12 brought more: Wells Fargo+1.17% — Wells Fargo, up 1.17 percent today cut its Figma target to $30 from $34, cut Adobe−3.29% — Adobe, down 3.29 percent today two rating steps on AI competition, and Barclays−0.09% — Barclays, down 0.09 percent today cut HubSpot−3.96% — HubSpot, down 3.96 percent today and monday.com−4.10% — monday.com, down 4.10 percent today, whose AI annual recurring revenue is 1% of its total. 7 Bank of America's−0.91% — Bank of America, down 0.91 percent today Salesforce−2.94% — Salesforce, down 2.94 percent today upgrade argued the opposite: AI deepens reliance on software holding a company's business logic. 7
The tell is credit conversion
Figma reports third-quarter results on November 4, its first print since the agent reached every customer. 82 Two lines decide it. First, paid credit consumption: over 80% of customers spending more than $10,000 a year were already consuming AI credits weekly at the end of June, and more than half were using the agent weekly. 5 Second, retention: net dollar retention, the year-over-year spending growth of existing customers, stood at 136% in the June quarter. 5
Field's answer to the street is a commodity argument: "In a world where code is becoming a commodity," he told CNBC-TV18, "what matters? It's design, it's craft, it's point of view." 9 Melwani says Figma will "take price at the right point", meaning prices rise only once demand proves. 1 November 4 shows whether the free agents recruited paying customers or just burned margin.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
