Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 8 Oct, 25 | FIG | Buy | USD 66.89 | USD 71.8 | USD 77.5 | 7 days | Closed |
1.15%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Robust Revenue Growth: Figma recorded a strong 41% year-over-year increase in revenue, rising from USD 177.2 million in Q2 FY24 to USD 249.6 million in Q2 FY25
Expansion of Large Enterprise Accounts: The company’s enterprise penetration strengthened notably, as the number of customers contributing more than USD 100,000 in annual recurring revenue (ARR) rose from 787 in Q2 FY24 to 1,119 in Q2 FY25, representing a 42% increase
Margin Compression due to AI Investment: Figma’s non-GAAP gross margin declined from 92% in Q2 FY24 to 90% in Q2 FY25
Slight Decline in Customer Retention Efficiency: The company’s net dollar retention rate modestly fell from 130% in Q2 FY24 to 129% in Q2 FY25
Figma faces execution risk from margin pressure and uncertain monetization timelines for its newly launched AI-based products, which could delay profitability if customer adoption lags expectations
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 66.89 | 60.0 | 71.8 | 77.5 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Revenue and Profitability Overview: Figma reported record revenue of USD 250 million in Q2 FY25, marking a 41% year-over-year (YoY) increase from USD 177.2 million in Q2 FY24. This performance was driven by strong adoption across its AI-powered design and collaboration suite. Despite rising expenses related to AI infrastructure and marketing, the company remained profitable with a non-GAAP operating margin of 5%, compared to 3% in Q2 FY24. Furthermore, the adjusted free cash flow margin stood at 24%, highlighting efficient cash generation despite higher R&D investments.
Customer Expansion and Retention: Customer growth remained robust, underscoring the company’s strong enterprise adoption. Figma ended the quarter with 11,906 paid customers generating more than USD 10,000 in annual recurring revenue (ARR), up 31% YoY from 9,071 in Q2 FY24. Likewise, large-scale customers spending over USD 100,000 in ARR increased 42% YoY, reaching 1,119 accounts. However, the net dollar retention rate (NDR) declined modestly from 130% in Q2 FY24 to 129% in Q2 FY25, reflecting normalization as Figma’s customer base matures and multi-product expansion stabilizes.
Product Innovation and Ecosystem Expansion: Figma demonstrated accelerated innovation, doubling its product portfolio during the quarter. It launched Figma Make, an AI-based “prompt-to-code” solution that transforms designs or natural-language prompts into functional prototypes, and Figma Draw, a tool optimized for vector design and creative expression. Additionally, Figma Sites and Figma Buzz (both in beta) extended the platform’s use cases into website publishing and brand asset management, respectively. The integration of these tools strengthens Figma’s positioning as a full-stack collaborative design and development platform.
Financial Discipline and Investment Outlook: Despite investing heavily in AI development and marketing, Figma maintained prudent financial management. Sales and marketing costs decreased as a percentage of revenue from 46% in Q2 FY24 to 39% in Q2 FY25, illustrating improved operating leverage. The company closed the quarter with USD 1.6 billion in cash, equivalents, and marketable securities, providing flexibility for future innovation and potential acquisitions. Management indicated that margins may compress in the near term due to higher AI-related inference costs but reaffirmed its commitment to long-term profitable growth.
Regional and Customer Use Case Expansion: Figma continued to deepen its international presence, localizing its platform and customer support for Korean and Brazilian Portuguese users. This expansion helped attract major clients such as Itaú Unibanco and Nubank in Latin America, both leveraging Figma Enterprise to accelerate product development. Additionally, case studies like Coinbase demonstrated improved design-to-code efficiency via Figma’s Dev Mode MCP server, validating the company’s strategic emphasis on AI-enhanced developer tools.
Outlook and Guidance: For Q3 FY25, Figma projected revenue between USD 263 million and USD 265 million, and for FY25, between USD 1.021 billion and USD 1.025 billion, representing ~37% annual growth at the midpoint. The company expects full-year non-GAAP operating income between USD 88 million and USD 98 million, reinforcing its trajectory toward sustained profitability while continuing to invest in AI-driven product development and ecosystem expansion.
Strategic Positioning and Market Context: In an environment where AI is transforming software creation, Figma positions itself as a design-centric enabler of AI-augmented product development. The company’s unified platform approach differentiates it from traditional design tools by integrating design, prototyping, collaboration, and development within a single ecosystem. This strategy aligns with Figma’s broader mission to make design a key competitive differentiator for enterprises across industries.
Technical Commentary: FIG's stock price found support at key levels and is trending higher, indicating the potential for further upside in the near term. The 14-period RSI remains above the midpoint, suggesting possible buying momentum in the short run. Additionally, the stock is trading above its 21-period simple moving average; a sustained move above this level could signal a bullish acceleration. As long as the price remains above these important support zones and continues its upward trend, technical indicators suggest a higher probability of an upcoming rally.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Figma, Inc. (NYSE: FIG) at its current market price of USD 66.89 as of October 8, 2025 (7:35 am PDT).
Data Powered by EOD Historical Data (“EODHD”).
Sector: Industry:
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) |
|---|---|---|---|---|---|---|
| FIG Figma, Inc. |
1.56 4.34% | 37.50 | - | - | - | - |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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