By Zaheer Kachwala
(Reuters) -Figma raised its annual revenue forecast on Wednesday, banking on the collaborative design software provider’s efforts to expand its product line-up and grow its user base.
In a crowded market, the company has emphasized its browser-based model, as well as its artificial intelligence tools to reel in users across diverse segments, including advertisers, freelancers and global corporations.
In July, the company launched Figma Make – an AI-powered product that turns a written prompt into a functional prototype – as part of efforts to embed the booming technology into its products.
Figma has also partnered with OpenAI to integrate its app into ChatGPT, allowing users to create designs based on conversation with the chatbot, potentially opening Figma’s products to millions.
Figma’s Chief Financial Officer, Praveer Melwani, told Reuters that the company was facing some near-term margin compression as it invests to create new products, but expects that pressure to ease as it begins to monetize more tools.
By the end of September, around 30% of paid customers spending over $100,000 in annual recurring revenue were using Figma Make on a weekly basis, Melwani said.
The company now expects revenue of between $1.044 billion and $1.046 billion for fiscal 2025, compared with its prior forecast of between $1.021 billion and $1.025 billion.
For the fourth quarter, the company expects revenue of between $292 million and $294 million, compared with estimates of $282.9 million, according to data compiled by LSEG.
Its third-quarter revenue of $274.2 million beat estimates of $265.2 million.
It reported a net loss of $1.1 billion, compared with a loss of $15.6 million in the same period a year earlier, due to one-time stock-based compensation expense related to its initial public offering.
The company’s shares have fallen more than 60% through Tuesday close since their blockbuster listing in July.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila)
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