Figma Beats Earnings, Jumps 11% — A Turning Point for SaaS?
February 18, 20266 min read
Figma Beats Earnings, Jumps 11% — A Turning Point for SaaS?
Strong earnings revive SaaS hopes
Tendrill
Figma Beats Earnings, Surges 11% After Hours — Is the SaaS Selloff Finally Over?
Figma ($FIG) delivered a much-needed dose of optimism to battered software investors on Wednesday evening, reporting Q4 2025 earnings that topped Wall Street estimates on both the top and bottom lines — and issuing full-year revenue guidance that came in above consensus. The stock, which had cratered roughly 85% from its 52-week high of $142.92 amid a brutal sector-wide selloff, jumped more than 11% in after-hours trading from $24.19 to $26.90. For a stock that had been left for dead by momentum traders and skeptical analysts alike, tonight's print changes the conversation.
The Numbers: A Clean Beat
Figma posted adjusted EPS of $0.08 for Q4 2025, beating the FactSet consensus estimate of $0.07 — and comfortably ahead of the $0.06 estimate cited by many on the Street heading into the report. Revenue came in at $293 million, in line with the high end of the company's own guidance range of $292–$294 million and representing 35% year-over-year growth.
Perhaps more importantly, Figma issued annual revenue guidance above Wall Street expectations, signaling that management sees robust demand continuing into 2026. The company had previously guided full-year fiscal 2025 revenue to $1.044–$1.046 billion, representing approximately 40% YoY growth — and tonight's above-consensus forward look suggests the momentum isn't slowing.
What the Market Was Watching
Heading into tonight's report, the stakes couldn't have been higher. As Investing.com noted, investors were laser-focused on whether Figma's AI strategy could reverse the stock's punishing decline and prove out new revenue streams. Analysts expected the print to determine whether Figma could stabilize revenue growth around the 35% level while charting a credible path to margin improvement.
Beyond the headline numbers, the metrics that matter most for a SaaS company at Figma's stage were closely scrutinized:
Net Dollar Retention (NDR): Figma reported NDR of 131% for customers spending over $10,000 in annual recurring revenue in Q3, up 2 points quarter-over-quarter — a sign that existing customers are expanding their usage, not churning
$10K+ ARR Customer Growth: The company added over 1,000 customers spending $10,000 or more in ARR during Q3 alone, crossing the milestone
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$1 billion annual revenue run rate
Enterprise Stickiness: The collaborative design platform has proven difficult to rip out once embedded in product workflows, a key differentiator that analysts at Wells Fargo and RBC have pointed to as a reason to stay constructive on the name
The "SAASpocalypse" Backdrop
To understand why tonight's results matter so much, you have to understand how bad the last several months have been for software stocks. Figma's stock had collapsed from its IPO-era highs alongside a broader SaaS meltdown that some traders dubbed the "SaaSpocalypse" — a wave of selling driven by fears that large language models and AI-native tools could disrupt or outright replace traditional SaaS products.
The iShares software ETF fell into bear market territory. Piper Sandler slashed its Figma price target by 50% — from $70 to $35 — just weeks before earnings, citing mounting pressures across the software sector. The stock touched a 52-week low of $19.85, and short interest climbed to roughly 8.6% of the public float. The narrative around Figma had shifted from "high-growth IPO winner" to "overvalued SaaS casualty."
"Figma's stock trades at approximately $23, down roughly 85% from its 52-week high, swept up in the broader selloff of software-as-a-service companies." — Investing.com
The Anthropic Wildcard
One development that flew somewhat under the radar heading into earnings was Figma's partnership with Anthropic, announced just a day before the earnings release. The integration embeds AI-generated code directly into Figma's design environment — a significant move that positions the company not as a victim of the AI wave, but as a beneficiary of it.
This is a critical reframe. The bear case on Figma has always been that AI tools like Anthropic's Claude or similar products could enable developers to build interfaces without ever opening a design tool. The Anthropic partnership flips that script, suggesting Figma intends to be the layer where AI-generated output gets refined, iterated, and shipped — not replaced.
The company's earlier investment in OpenAI integrations — embedding ChatGPT capabilities directly into the canvas — further reinforces this strategy. As one analyst community note put it, this "serves as a defensive moat against emerging AI-native competitors."
Analyst Sentiment and Price Targets
Despite the brutal stock performance heading into tonight, Wall Street's analyst community never fully abandoned the bull case. Ten analysts cover the stock with a consensus rating of Outperform and an average price target of $52.11 — representing more than 125% upside from where the stock was trading before tonight's report.
Wells Fargo upgraded Figma to Overweight with a $52 price target in January, calling it a top AI software play for 2026
RBC has remained constructive, predicting growth for AI-ready software firms like Figma as enterprise spending stabilizes
Piper Sandler maintained Overweight even while slashing their target to $35, signaling the thesis wasn't broken — just impaired by macro headwinds
The 11% after-hours pop brings the stock closer to $26.90, still a fraction of that $52 average target. If management's tone on the earnings call confirms the above-consensus guidance with conviction, expect analysts to begin revising targets higher in the days ahead.
What This Means for the Broader SaaS Recovery Narrative
Figma's beat matters beyond just one stock. The company is one of the highest-profile pure-play SaaS names to report in this cycle, and its results carry read-through implications for the entire software sector.
A few key takeaways for the broader market:
Enterprise demand for design and collaboration tools remains resilient, even in a cost-conscious environment
AI is an opportunity, not just a threat — companies that move quickly to integrate AI into their core product (as Figma has with Anthropic and OpenAI) can neutralize the disruption narrative
Net dollar retention above 130% signals pricing power and product stickiness that pure disruption bears have underestimated
The SaaSpocalypse selloff may have been overdone — at least for companies with real revenue scale, enterprise customer bases, and defensible workflows
As 247 Wall Street noted ahead of the print, Figma "has since attracted bullish attention from analysts who see it as a rare AI-ready software winner." Tonight's results give those bulls something concrete to point to.
The Bottom Line
Figma entered tonight's earnings report as one of the most beaten-down high-profile SaaS names in the market — a stock that had lost the majority of its value from its post-IPO highs while carrying the weight of existential questions about AI disruption. What it delivered instead was a clean beat, above-consensus guidance, and a product strategy that positions it as an AI enabler rather than an AI casualty.
At $26.90 in after-hours — still more than 80% below its 52-week high and well below the analyst consensus target of $52 — the setup for a sustained recovery remains in place, provided the earnings call delivers on the early promise of tonight's numbers. For a sector that has been starved of good news, Figma just gave software bulls exactly what they needed.