Figma, the AI-driven online collaborative design platform, had a roaring success on its stock market debut this week. The stock closed at $115.50 per share on Thursday, more than three times the $33 per share IPO listing price. The first day of trading left it with a market value of more than $60bn. Friday pre-market trading saw shares almost touch $143 before pulling back to around $120 in normal trading hours.

What is Figma?

Founded in 2012, Figma has become the go-to platform for collaborative online app and website design. On its website it says it has “evolved from a design tool to a connected, AI-powered platform that helps teams go from idea to shipped product”. 

Adobe, a leader in digital marketing and creative tools such as Photoshop and InDesign, attempted to buy Figma for $20bn, but abandoned the transaction in late 2023 due to antitrust concerns as regulators in the UK and European Union launched competition probes.

Among large cap stocks Fima is almost a monopoly, embedded in 95% of Fortune 500 companies. Figma is used by 78% of Fortune 2000 companies, according to its S-1 filing, and boasts 13mn monthly active users. It’s very sticky, too, with 91% customer retention.

Looking ahead to future growth, the company says it will be able to add many AI tools to its platform. Integration of AI tools suggest it is well placed to tap the rapidly growing AI-driven design market. The blockbuster IPO reflects investor appetite for companies with exposure to AI trends.

This year it’s launched four new products: Figma Sites, Figma Make, Figma Buzz, and Figma Draw. Figma Sites is a product that lets users design a website and directly publish it to the web, with a custom URL. Figma Make is an AI-powered product that turns a prompt into a fully functional prototype. Figma Buzz is a product for creating social media assets, display ads, and other marketing materials. And Figma Draw provides a dedicated space for detailed iconography and product illustrations.

But be warned – CEO Dylan Field warned in the IPO prospectus that AI spending “will potentially be a drag on our efficiency for several years”.

How do the numbers stack up?

In Q1 2025, Figma made $45mn of net income on$228.2 million in revenue, up 46% year-over-year. Preliminary Q2 results show revenues rising to between $247 million and $250 million, and operating income of $9 million to $12 million. There was a net loss of $732mn last year, but this was largely due to paying taxes associated with employee stock sales.

Fast growing, but slowing? Growth of 46% in the first quarter cmpared with 48% across the whole of 2024. Q2 sales growth is decelerating again to around 40%. But margins remain healthy – for Q1 it posted 91% gross margin and 17% operating margin.

Figma believes its total addressable market is $33 billion today across the “global workforce engaged in software design,” as identified by IDC.

Valuation seems lofty?

Annualising the Q2 number leads to $1bn annual revenue – which gives us a valuation of 60x sales based on the closing price on Thursday. Although not a strictly even comparison, Adobe did $21.5bn in revenues last year and has a market cap of around $150bn, or roughly 7x sales.

Will it hold? Checking in on other blockbuster IPOs

DoorDash: Shares opened at $182 on debut in December 2020, way above the IPO price of $102, and closed at $189.51.  Shares then advanced towards $200 in late 2021 before falling sharply back to around $45. But after this trough we have lately seen a major bounce back to all-time highs above $252.

Airbnb: Shares opened at $146 on its first day of trading one day after DoorDash, more than double the $68 per share price set for its IPO. Shares have largely drifted since and now trade around $130.

Circle: Shares doubled on debut on 5 June and have extended gains in a frenzied first couple of months. The stock opened at $69 after its IPO priced at $31 – since then it’s traded as high as $299 and trades around $170 as of Friday, 1 August.

And one that flopped

CoreWeave: Shares ended their first trading day in March flat amid a volatile debut. The stock priced at $40, where it ended, and fell as low as $37.46, having initially targeted an IPO at a range of $47-$55. After this inauspicious start the stock went on a tear and traded as high as $187 before giving up some ground, last at $108.