Why Figma Stock Is Plummeting Today

Key Points

• Figma published its second-quarter results yesterday and deliverd sales that were slightly better than expected.

• This was Figma's first earnings report as a publicly traded company, and it arrived with guidance that disappointed some investors.

• Figma's guidance for significant sales growth deceleration is prompting sell-offs today.

• 10 stocks we like better than Figma ›

Figma (NYSE: FIG) stock is sinking rapidly in Thursday's trading. The company's share price was down 17.7% as of 12:30 p.m. ET and had been down as much as 21.9% earlier in trading.

After the market closed yesterday, Figma published its first quarterly report as a publicly traded company. While its sales and earnings for the second quarter were slightly better than Wall Street's targets, the company's forward guidance is driving sell-offs for the stock today.

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Figma stock is sinking despite solid Q2 results

Figma reported non-GAAP (adjusted) net income of $19.8 million on revenue of $249.6 million in Q2. The company's net profit was roughly in line with Wall Street's target, and sales for the period topped the average analyst estimate's call for sales of $248.8 million.

Figma had already published preliminary results for the quarter, so the performance for the period was in line with the market's expectations. On the other hand, the company's guidance for the Q3 and full-year periods disappointed investors and is prompting a big valuation pullback today.

What's next for Figma?

Figma completed its initial public offering (IPO) at the end of July, and the quarterly report published yesterday has provided investors with the company's first official guidance update. For the third quarter, Figma is targeting sales between $263 million and $265 million, representing growth of roughly 33% year over year at the midpoint of the guidance range.

On the heels of the growth it posted in Q2 and the 48% annual sales increase recorded in 2024, the company's forecasts call for a substantial deceleration of growth. Figma's second-quarter results and forward guidance don't look terrible by any stretch of the imagination, but the stock could continue to be volatile as investors try to assess how to value the newly public company and its longer-term growth trajectory.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.