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Figma

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Large accounts are expanding faster than the customer base

Net dollar retention rose to 136% from 129%, and accounts above one hundred thousand dollars are now 10.2% of larger customers, up from 9.4%.

Q2 FY2026, the quarter to Jun 30, 2026 · 10-Q filed Aug 5, 2026

Q2 FY2026 · revenue
$370.1M+48.2% on the year
Operating margin
-31.7%
Net income
-$112.2M
Free cash flow, quarter
$54.2M
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Key insights · Q2 FY2026
  1. 01

    Large accounts are expanding faster than the customer base

    Net dollar retention rose to 136% from 129%, and accounts above one hundred thousand dollars are now 10.2% of larger customers, up from 9.4%.

    Why it matters

    Revenue rose 48.2%, to $370.1M from $249.6M. The filing says the increase was "primarily driven by growth and expansion in total Paid Customers". Customers above ten thousand dollars of annual recurring revenue rose to 15,964 from 11,906, and those above one hundred thousand dollars rose to 1,635 from 1,119.1

    Net dollar retention, measured on customers above ten thousand dollars of annual recurring revenue, was 136% against 129% a year earlier. After churn and contraction, the same group of accounts paid more than it did twelve months before, and the pace of that expansion went up rather than down.1

    AnalysisThe mix is moving up. Accounts above one hundred thousand dollars made up 10.2% of the larger-customer group, against 9.4% a year earlier. Growth is coming from organizations rolling Figma out more widely, which is what the multi-product seats and enterprise tiers are built to capture.

    The filing expects net dollar retention to fluctuate or decline as the revenue base grows and penetration rises, and says its pricing changes make comparisons with earlier periods less meaningful.1

  2. 02

    AI hosting pulled gross margin down, then it partly recovered

    Cost of revenue grew 116.8% against revenue growth of 48.2%, cutting gross margin to 83.7% from 88.8%, though it was 79.4% in the March quarter.

    Why it matters

    Cost of revenue was $60.5M against $27.9M a year earlier, 16.3% of revenue against 11.2%. The filing names the cause: higher technical infrastructure and hosting costs relating to AI and to more usage by paid users. Gross profit grew 39.6%, slower than revenue.1

    Within the year the direction turned. In the March quarter cost of revenue was $68.7M on revenue of $333.4M, a gross margin of 79.4%. In the June quarter cost of revenue fell to $60.5M while revenue rose to $370.1M. March is when Figma began enforcing AI credit limits, and the filing says AI costs may move as it makes changes "intended to manage usage and optimize the efficiency of our AI-related spend".1

    AnalysisThe timing fits metering doing its job, but the filing does not attribute the recovery to the credit limits, and one quarter is not a trend. Gross margin also understates total AI cost: hosting and AI for free users is booked in sales and marketing, not in cost of revenue.

    The company expects its AI investments to "negatively impact our gross margins and operating margins" in the short term, and calls the longer-term impact "currently unknown".1

  3. 03

    A $117.3M operating loss alongside $54.2M of free cash

    Operating expenses reached 137.9% of gross profit, mostly from post-IPO stock pay the filing names, yet the quarter still produced a 14.6% free cash flow margin.

    Why it matters

    Operating expenses rose 94.3%, to $426.9M, or 115.4% of revenue against 88.0% a year earlier. General and administrative rose 169.0% and research and development 101.5%. The filing attributes most of the increase in each line to stock-based compensation and related payroll taxes recognized after and as a result of the initial public offering.1

    Cash moved the other way. Operating cash flow was $60.9M and free cash flow $54.2M, a 14.6% margin. Subscriptions are generally invoiced in advance, and capital spending of $6.7M was 1.8% of revenue. Over the last full year the same split held: free cash flow of $246.2M against an operating loss of $1.29B.1

    Free cash flow did not keep pace with revenue. It was $61.3M a year earlier, a 24.6% margin, so cash generation fell while revenue grew 48.2%.1

    AnalysisStock pay uses no cash, but shareholders bear it through dilution, so free cash flow on its own overstates the economics. The reported loss narrows only if revenue grows faster than that expense.

  4. 04

    The year-ago profit came almost entirely from investment income

    A year earlier other income was $37.0M, or 94.7% of the $39.1M pre-tax profit, while operations earned just $2.08M.

    Why it matters

    In the June quarter a year earlier, income from operations was $2.08M, other income $37.0M, pre-tax income $39.1M and net income $28.2M. Other income consists mainly of interest on cash and securities and gains or losses on equity holdings, including a Bitcoin exchange traded fund.1

    This quarter other income fell to $7.6M. The filing attributes the decrease to an unfavorable change in the fair value of equity securities, primarily the Bitcoin fund moving from an unrealized gain a year earlier to an unrealized loss. Net income of $28.2M became a net loss of $112.2M.1

    AnalysisThe swing in net income mixes two separate stories: an operating line driven by equity pay, and investment results that move with Bitcoin. Neither says much about demand, which the customer counts and retention track more directly.

Sources

  1. 1.Figma 10-Q for the period to 2026-06-30 (the filing), Aug 5, 2026, read Nov 1, 2026

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Business performance

Growth, profit and margin

Revenue went from $504.9M in FY2023 to $1.1B in FY2025, the operating margin from -14.5% to -122.2%, over 2 years.

  • Revenue$1.1B
  • Operating income-$1.3B
  • Operating margin-122.2%
Period
Q2 FY2026
Revenue
$370.1M
Operating income
-$117.3M
Operating margin
-31.7%
Net income
-$112.2M
Free cash flow
$54.2M
Business performance

Does the profit turn into cash?

Q2 FY2026: free cash flow of $54.2M against net income of -$112.2M in the quarter.

  • Operating cash flow$250.7M
  • Capital expenditure$4.4M
  • Free cash flow$246.2M
  • Net income-$1.3B

Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.

Financial data and sources

The figures

Margins, cash and growth for the period, each with what it was computed from.

Gross margin
83.7%
Source10-Q, Derived from Gross profit and Revenue in the 10-Q filed 2026-08-05
Operating margin
-31.7%
Source10-Q, Derived from Income (loss) from operations and Revenue in the 10-Q filed 2026-08-05
Net margin
-30.3%
Source10-Q, Derived from Net income (loss) and Revenue in the 10-Q filed 2026-08-05
Free cash flow, quarter
$54.2M
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-08-05
Free cash flow margin, quarter
14.6%
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-08-05
Cash conversion, quarter
-0.54x
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-08-05
Capital spending, quarter
1.8%
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-08-05
Revenue growth
+48.2%
From the record's own history, against the prior year.

Where revenue comes from

Every breakdown the filing reports for the period, with each item's share.

This filing reports no breakdown of revenue by product, segment or region for the period.

What it costs

The cost lines beneath operating income, each as a share of revenue, then the operating result.

Costs are reported by function: what it cost to make what was sold, then the expenses of selling, developing and administering.

Cost lineQ2 FY2026Of revenueSource
Cost of revenue$60.5M16.3%Source10-Q, us-gaap:CostOfRevenue, as reported in the 10-Q filed 2026-08-05
Income (loss) from operations-$117.3M-31.7%Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-08-05

Operating figures the company states

From the text of the filing rather than its statements, each with the sentence that states it.

Net Dollar Retention Rate
136.0%
As of Jun 30, 2026
View source
Net Dollar Retention Rate 136 % 129 %
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations, 10-Q filed Aug 5, 2026
Paid Customers with more than $10,000 in ARR
15,964 customers
As of Jun 30, 2026
View source
Paid Customers with more than $10,000 in ARR 15,964 11,906
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations, 10-Q filed Aug 5, 2026
Paid Customers with more than $100,000 in ARR
1,635 customers
As of Jun 30, 2026
View source
Paid Customers with more than $100,000 in ARR 1,635 1,119
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations, 10-Q filed Aug 5, 2026

The statements, as filed

The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.

Income statement18 lines, as presented in the 10-Q
LineQ2 FY2026A year earlierChangeOf revenueSource
Income Statement
Revenue$370.1M$249.6M+48%100%Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-08-05
Cost of revenue$60.5M$27.9M+117%16.3%Source10-Q, us-gaap:CostOfRevenue, as reported in the 10-Q filed 2026-08-05
Gross profit$309.6M$221.8M+40%83.7%Source10-Q, us-gaap:GrossProfit, as reported in the 10-Q filed 2026-08-05
Operating expenses
Research and development$167.3M$83.1M+101%45.2%Source10-Q, us-gaap:ResearchAndDevelopmentExpense, as reported in the 10-Q filed 2026-08-05
Sales and marketing$154.9M$97.7M+58%41.8%Source10-Q, us-gaap:SellingAndMarketingExpense, as reported in the 10-Q filed 2026-08-05
General and administrative$104.7M$38.9M+169%28.3%Source10-Q, us-gaap:GeneralAndAdministrativeExpense, as reported in the 10-Q filed 2026-08-05
Total operating expenses$426.9M$219.7M+94%115.4%Source10-Q, us-gaap:OperatingExpenses, as reported in the 10-Q filed 2026-08-05
Income Statement
Income (loss) from operations-$117.3M$2.1M31.7%Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-08-05
Other income, net$7.6M$37.0M-79%2.1%Source10-Q, us-gaap:NonoperatingIncomeExpense, as reported in the 10-Q filed 2026-08-05
Income (loss) before income taxes-$109.7M$39.1M29.6%Source10-Q, us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest, as reported in the 10-Q filed 2026-08-05
Provision for income taxes$2.5M$10.8M-77%0.7%Source10-Q, us-gaap:IncomeTaxExpenseBenefit, as reported in the 10-Q filed 2026-08-05
Net income (loss)-$112.2M$28.2M30.3%Source10-Q, us-gaap:NetIncomeLoss, as reported in the 10-Q filed 2026-08-05
Less: net income attributable to participating securities (shown as a deduction)($0)$27.4M0.0%Source10-Q, us-gaap:UndistributedEarningsLossAllocatedToParticipatingSecuritiesBasic, as reported in the 10-Q filed 2026-08-05
Net income (loss) attributable to common stockholders-$112.2M$846.0K30.3%Source10-Q, us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic, as reported in the 10-Q filed 2026-08-05
Net income (loss) per share, basic and diluted:
Net income (loss) per share, basic (in usd per share)-$0$00.0%Source10-Q, us-gaap:EarningsPerShareBasic, as reported in the 10-Q filed 2026-08-05
Net income (loss) per share, diluted (in usd per share)-$0$00.0%Source10-Q, us-gaap:EarningsPerShareDiluted, as reported in the 10-Q filed 2026-08-05
Weighted-average shares outstanding used in computing net income (loss) per share attributable to common stockholders, basic (in shares)527,460,000215,062,000+145%Source10-Q, us-gaap:WeightedAverageNumberOfSharesOutstandingBasic, as reported in the 10-Q filed 2026-08-05
Weighted-average shares outstanding used in computing net income (loss) per share, diluted (in shares)527,460,000231,702,000+128%Source10-Q, us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding, as reported in the 10-Q filed 2026-08-05
Cash flow statement5 lines, as presented in the 10-Q

Year to date, as a quarterly filing reports it.

LineQ2 FY2026A year earlierChangeSource
Cash flows from operating activities:
Net income (loss)-$112.2M$28.2MSource10-Q, us-gaap:NetIncomeLoss, as reported in the 10-Q filed 2026-08-05
Statement of Cash Flows
Cash, cash equivalents, and restricted cash—end of period$456.4M$632.4M-28%Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-08-05
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$445.8M$621.6M-28%Source10-Q, us-gaap:CashAndCashEquivalentsAtCarryingValue, as reported in the 10-Q filed 2026-08-05
Restricted cash, included in prepaid expenses and other current assets$10.6M$10.8M-2.0%Source10-Q, us-gaap:RestrictedCashAndCashEquivalents, as reported in the 10-Q filed 2026-08-05
Total cash, cash equivalents and restricted cash$456.4M$632.4M-28%Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-08-05
Balance sheet33 lines, as presented in the 10-Q
LineQ2 FY2026A year earlierChangeSource
Current assets
Cash and cash equivalents$445.8M$621.6M-28%Source10-Q, us-gaap:CashAndCashEquivalentsAtCarryingValue, as reported in the 10-Q filed 2026-08-05
Digital assets, current$15.8MSource10-Q, us-gaap:CryptoAssetFairValueCurrent, as reported in the 10-Q filed 2026-08-05
Marketable securities$1.22BSource10-Q, us-gaap:MarketableSecuritiesCurrent, as reported in the 10-Q filed 2026-08-05
Accounts receivable, net$190.9MSource10-Q, us-gaap:AccountsReceivableNetCurrent, as reported in the 10-Q filed 2026-08-05
Prepaid expenses and other current assets$103.2MSource10-Q, us-gaap:PrepaidExpenseAndOtherAssetsCurrent, as reported in the 10-Q filed 2026-08-05
Total current assets$1.98BSource10-Q, us-gaap:AssetsCurrent, as reported in the 10-Q filed 2026-08-05
Assets
Property and equipment, net$38.3MSource10-Q, us-gaap:PropertyPlantAndEquipmentNet, as reported in the 10-Q filed 2026-08-05
Intangible assets, net$13.4MSource10-Q, us-gaap:FiniteLivedIntangibleAssetsNet, as reported in the 10-Q filed 2026-08-05
Digital assets, non-current$10.1MSource10-Q, us-gaap:CryptoAssetFairValueNoncurrent, as reported in the 10-Q filed 2026-08-05
Goodwill$101.4MSource10-Q, us-gaap:Goodwill, as reported in the 10-Q filed 2026-08-05
Operating lease right-of-use assets$62.3MSource10-Q, us-gaap:OperatingLeaseRightOfUseAsset, as reported in the 10-Q filed 2026-08-05
Restricted cash$9.8MSource10-Q, us-gaap:RestrictedCashNoncurrent, as reported in the 10-Q filed 2026-08-05
Other assets$138.9MSource10-Q, us-gaap:OtherAssetsNoncurrent, as reported in the 10-Q filed 2026-08-05
Total assets$2.35BSource10-Q, us-gaap:Assets, as reported in the 10-Q filed 2026-08-05
Liabilities and stockholders’ equity
Accounts payable$26.1MSource10-Q, us-gaap:AccountsPayableCurrent, as reported in the 10-Q filed 2026-08-05
Accrued and other current liabilities$91.6MSource10-Q, us-gaap:AccruedLiabilitiesCurrent, as reported in the 10-Q filed 2026-08-05
Accrued compensation and benefits$53.5MSource10-Q, us-gaap:EmployeeRelatedLiabilitiesCurrent, as reported in the 10-Q filed 2026-08-05
Operating lease liabilities, current$8.7MSource10-Q, us-gaap:OperatingLeaseLiabilityCurrent, as reported in the 10-Q filed 2026-08-05
Deferred revenue$626.8MSource10-Q, us-gaap:ContractWithCustomerLiabilityCurrent, as reported in the 10-Q filed 2026-08-05
Total current liabilities$806.7MSource10-Q, us-gaap:LiabilitiesCurrent, as reported in the 10-Q filed 2026-08-05
Operating lease liabilities, non-current$59.1MSource10-Q, us-gaap:OperatingLeaseLiabilityNoncurrent, as reported in the 10-Q filed 2026-08-05
Other non-current liabilities$7.6MSource10-Q, us-gaap:OtherLiabilitiesNoncurrent, as reported in the 10-Q filed 2026-08-05
Total liabilities$873.4MSource10-Q, us-gaap:Liabilities, as reported in the 10-Q filed 2026-08-05
Stockholders’ equity:
Convertible preferred stock$0Source10-Q, us-gaap:PreferredStockValue [us-gaap:PreferredStockMember], as reported in the 10-Q filed 2026-08-05
Blockchain$0Source10-Q, us-gaap:CommonStockValue [fig:BlockchainMember], as reported in the 10-Q filed 2026-08-05
Common Class A$4.0KSource10-Q, us-gaap:CommonStockValue [us-gaap:CommonClassAMember], as reported in the 10-Q filed 2026-08-05
Common Class B$0Source10-Q, us-gaap:CommonStockValue [us-gaap:CommonClassBMember], as reported in the 10-Q filed 2026-08-05
Common Class C$0Source10-Q, us-gaap:CommonStockValue [us-gaap:CommonClassCMember], as reported in the 10-Q filed 2026-08-05
Additional paid-in capital$3.18BSource10-Q, us-gaap:AdditionalPaidInCapital, as reported in the 10-Q filed 2026-08-05
Accumulated other comprehensive income (loss)-$2.6MSource10-Q, us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax, as reported in the 10-Q filed 2026-08-05
Accumulated deficit-$1.70BSource10-Q, us-gaap:RetainedEarningsAccumulatedDeficit, as reported in the 10-Q filed 2026-08-05
Total stockholders’ equity$1.48B$1.43B+3.6%Source10-Q, us-gaap:StockholdersEquity, as reported in the 10-Q filed 2026-08-05
Liabilities and stockholders’ equity
Total liabilities and stockholders’ equity$2.35BSource10-Q, us-gaap:LiabilitiesAndStockholdersEquity, as reported in the 10-Q filed 2026-08-05

About this data

Source
Figma 10-Q, accession 0001628280-26-053348, filed Aug 5, 2026, read on Nov 1, 2026.
History
From the SEC's XBRL company facts, the value from the latest filing that stated each period.
Reading
Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
Version
methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-01
Edge and risks

What holds Figma's model up, and what could bend it

Competitive edge

  • Free users carry Figma into paying organizations

    Hosting and AI for free users are booked in sales and marketing, 41.8% of revenue, treating the free plan as the main acquisition channel.

    The detail

    The filing says "a significant portion of our revenue growth has been derived from organic growth that occurs within organizations when new users decide to use our platform based on word-of-mouth recommendations". A free Starter plan brings people in; paid plans carry the features teams need.1

    Sales and marketing took 41.8% of revenue, up 2.7 points. The filing attributes part of the increase to higher hosting costs for free users as AI rolled out to them, and part to marketing including the annual user conference.1

    AnalysisWhy it holds: a tool that spreads through collaboration leaves shared files and habits across a company, and moving them is costly. The filing itself flags the limit: AI could lower switching costs through automated file conversion or recreation of design systems.

  • Customers pay up front and the servers are rented

    Capital spending was 1.8% of revenue and 11.0% of operating cash flow, so nearly all operating cash became free cash flow.

    The detail

    Agreements are generally non-cancelable and invoiced in advance, and the company relies on a third-party hosted infrastructure partner. Capital spending was $6.7M against operating cash flow of $60.9M, leaving free cash flow of $54.2M.1

    AnalysisCustomers fund the service before it is delivered and the company buys almost no equipment, so growth does not need heavy upfront investment. The trade-off is dependence on one hosting partner, which the filing says would disrupt operations if interrupted.

  • Each new product reaches another role in the same account

    Research and development took 45.2% of revenue, up from 33.3%, funding products aimed at developers, product managers and marketers inside existing customers.

    The detail

    Figma started as a design tool and has added whiteboarding, developer handoff, slides, prompt-to-prototype, website publishing, marketing assets and drawing, sold through multi-product seats, plus an MCP server that connects coding agents to designs. Research and development was $167.3M, up 101.5%.1

    AnalysisEach product gives an existing customer a reason to add people from another function, so an account can grow without adding designers. That breadth is one plausible source of the rise in net dollar retention to 136%, though the filing does not split growth by product.

What to watch

  • AI agents could do the work of paid seats

    The filing warns its seat-based model may fit less well as AI and agents let fewer people produce the same output.

    The detail

    In its words: "Our seat-based subscription model may become less aligned with customer value creation as AI automates or consolidates work that historically required multiple users." Since March, third-party agents can create and modify designs through its MCP server, and external agents often act through a single user's login, which seat-based billing may not detect.1

    AnalysisThis risk does not show in the numbers yet: net dollar retention rose to 136% and the count of customers above one hundred thousand dollars rose to 1,635. Retention among larger customers is where a shortfall would appear first.

  • AI features may cost more than they earn

    Figma depends on a few model providers and says price pressure could force it to run some AI features at low or negative gross margins.

    The detail

    The filing cites dependence on "a limited number of third-party model providers" that may also compete with it, and says it may have to "operate certain AI features at lower or negative gross margins for extended periods". After credit limits took effect in March it saw "elevated customer support volume, instances of customer dissatisfaction expressed through public and social channels, and reduced usage by certain customers".1

    The cost side is already visible: cost of revenue took 16.3% of revenue against 11.2% a year earlier. Whether credit revenue keeps pace with inference cost is the open question.1

  • Retention is expected to fluctuate as pricing keeps changing

    The filing expects net dollar retention, now 136%, to fluctuate or decline, and says pricing changes make past comparisons less meaningful.

    The detail

    The company lists the growing revenue base, deeper penetration and pricing changes as reasons retention could fall. Larger buyers use approval processes and admin controls on seat upgrades, which could slow the word-of-mouth growth inside organizations and raise the cost of winning customers.1

    Credit and usage billing adds new failure points the filing names: invoice disputes, refunds, judgment calls on revenue from unused credits, collection risk and consumer-protection claims.1

Sources

  1. 1.Figma 10-Q for the period to 2026-06-30 (the filing), Aug 5, 2026, read Nov 1, 2026
Go deeper

Figma, further in

Member research, then your own questions on ChatGPT.

What could change the outlook

What Figma's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.

  • What the AI margin depends on from here

    Which costs and pricing levers decide whether metered AI lifts or erodes Figma's gross margin, and which reported figures would show the direction first.

  • Seats, agents and how durable expansion is

    How much of Figma's growth rests on adding seats, what could replace that if AI shrinks teams, and where in each report the shift would surface.

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Questions to start with
  • Could AI agents working through Figma's MCP server reduce the paid seats behind its 136% net dollar retention?
  • Did enforcing AI credit limits in March help Figma's gross margin rise to 83.7% from 79.4% in one quarter?
  • How does Figma produce $54.2M of free cash flow in a quarter with a $117.3M operating loss?

Business Lens describes Figma from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.