Summary
Figma posted revenue of $333.4 million for the first quarter of fiscal 2026, up 46% from $228.2 million in the prior-year quarter. Growth accelerated for a second consecutive quarter, from 40% year over year in Q4 2025 and 38% in Q3 2025. Deferred revenue ended the period at $627.7 million, up 54.4% from $406.6 million a year earlier, and remaining performance obligations stood at $682.3 million. The customer mix keeps moving toward larger accounts, and that is where most of the expansion is coming from.
Profitability moved in the opposite direction. Gross profit rose 26.8% to $264.8 million, but gross margin fell to 79.4% from 91.5%, a decline of 12.1 percentage points. Management attributed the pressure to a $33.7 million increase in technical infrastructure and hosting costs tied to AI and heavier paid usage of the platform. The quarter produced an operating loss of $137.4 million against operating income of $39.7 million a year earlier, and operating margin was negative 41.2% versus 17.4%. Net loss was $142.4 million compared with net income of $44.9 million, and diluted EPS was negative $0.27 versus $0.04. Stock-based compensation is the main bridge between the GAAP loss and non-GAAP operating income of $52.1 million, a 16% non-GAAP operating margin.
Cash generation held steady. Operating cash flow was $97.3 million, flat against $97.2 million a year earlier, and operating cash flow margin was 29%. Capital expenditures rose to $7.8 million from $0.9 million. Free cash flow, a non-GAAP measure, was $88.6 million, a 27% margin. The operating cash figure absorbed a $56.1 million payment under the annual corporate bonus program, accrued during the year ended December 31, 2025, with no comparable payment in the prior-year period. Cash, cash equivalents, and marketable securities totaled $1.6 billion as of March 31, 2026, and the $500.0 million revolving credit facility was undrawn.
Customer metrics show broad expansion. Net Dollar Retention Rate was 139% as of March 31, 2026, up three percentage points from the prior quarter and above the 132% reported a year earlier. Paid customers with more than $10,000 in ARR reached 15,218, up 37% year over year, and those with more than $100,000 in ARR reached 1,525, up 48%. Total paid customers grew 54% to roughly 690,000. New Pro team conversions grew more than 150% year over year in the three months ended March 31, 2026. About 60% of paid customers with more than $100,000 in ARR used Figma Make weekly, up from over 50% in the prior quarter, and MCP weekly active users in Figma Design grew five times quarter over quarter. AI credit limits took effect on March 18, 2026. Over 75% of Org and Enterprise users who had previously exceeded those limits kept using AI credits in April, and over 95% of them remained active on the platform as of April 30, 2026.
Guidance points to continued growth. For the second quarter of 2026, Figma guided revenue to a range implying 40% year-over-year growth at the midpoint. For the full year 2026, it guided revenue to a range implying 35% year-over-year growth at the midpoint, plus non-GAAP operating income representing a non-GAAP operating margin of 9% at the midpoint. Management expects AI investments, including spend on inference and model training, to weigh on gross margin and operating margin, and expects cost of revenue to rise in absolute dollars. Free cash flow is expected to fluctuate and may fall as a percentage of revenue. The revolving credit facility requires liquidity of at least $100.0 million, and the company reported compliance as of March 31, 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $333.4M | $303.8M | +9.8% | — | — |
| Gross profit | $264.8M | $249.5M | +6.1% | — | — |
| Gross margin | 79.4% | 82.1% | -2.7 pp | — | — |
| Research & development | $173.0M | $195.8M | -11.7% | — | — |
| Sales & marketing | $125.6M | $134.2M | -6.4% | — | — |
| General & administrative | $103.6M | $114.9M | -9.8% | — | — |
| Total operating expenses | $402.2M | $445.0M | -9.6% | — | — |
| Operating income (loss) | -$137.4M | -$195.5M | +29.7% | — | — |
| Operating margin | -41.2% | -64.4% | +23.1 pp | — | — |
| Net income (loss) | -$142.4M | -$226.6M | +37.1% | — | — |
| Net margin | -42.7% | -74.6% | +31.9 pp | — | — |
| Diluted EPS | -$0.27 | -$0.67 | +$0.40 | — | — |
| Net retention rate | 139.0% | — | — | — | — |
Risks
MD&A states AI investments and AI inference/model training spend will negatively impact gross and operating margins; FY2026 Q1 gross margin fell to 79.4% from 91.5% in FY2025 Q1 and operating margin fell to -41.2% from 17.4%.
Starting in March 2026, Figma began enforcing AI credit limits and introduced monthly AI credit add-ons or pay-as-you-go usage; the filing states this led to elevated customer support volume, public customer dissatisfaction, and reduced usage by certain customers, with risk of further churn or disputes.
In March 2026, Figma introduced third-party AI agents through its MCP server; external agents using a single authenticated session may circumvent seat-based pricing, reduce paid seats, increase platform load, and create fraud/abuse risk.
AI could reduce the number of designers, developers, and collaborators needing seats and make the seat-based subscription model less aligned with customer value; customers may shift to credit, usage, or outcome based billing, pressuring revenue predictability and margins.
Larger platform providers, model providers, AI-native companies, and well-capitalized startups may bundle or subsidize AI functionality at low or no incremental cost, conditioning customers to expect free AI and pressuring Figma's pricing, gross margins, and operating margins.
AI features depend on a limited number of third-party foundational model providers that may also compete with Figma, limit access, change economic terms, or control user identity, billing, or distribution, reducing Figma's ability to differentiate and monetize.
Net Dollar Retention Rate was 139% as of March 31, 2026 versus 132% as of March 31, 2025, but the filing says it expects NDR to fluctuate or decline; customers have no obligation to buy monthly AI credit add-ons or pay-as-you-go usage and may curtail or stop AI feature use.
The EU AI Act and enacted or proposed U.S. state laws on automated decision-making, algorithmic discrimination, and high-risk AI impose transparency, risk assessment, human oversight, and compliance costs, with substantial fines for breaches.
Figma is and may become subject to litigation alleging breach of contract, trade secret misappropriation, and statutory violations regarding use of user data in AI training; AI outputs may also infringe third-party intellectual property, and indemnities from model providers may be inadequate.
As Figma sells to larger organizations, internal approval requirements can delay or prevent organic user growth; March 2025 administrator seat-upgrade controls may inhibit seat upgrades and increase customer acquisition costs.
Extended Lock-Up releases continue through August 31, 2026, with up to about 61.1 million shares released May 18, 2026 and about 77.7 million shares later; sales or perception of sales could pressure Class A stock, and CEO award settlement may require significant cash or cause dilution.
Credit, usage, or outcome based billing increases billing disputes, refunds, chargebacks, revenue recognition complexity, and indirect tax compliance risk; if credits, refunds, or price concessions exceed expectations, reported revenue, deferred revenue, and operating cash flows could be adversely affected.
Other income (expense), net decreased 159% in FY2026 Q1 partly from $7.3 million of unrealized losses on equity securities primarily a Bitcoin ETF and a $3.3 million remeasurement loss on Bitcoin; Figma held about 173 Bitcoins with fair value of $11.8 million as of March 31, 2026.
SaaS KPIs
All quarters →Free Cash Flow Margin
Net Dollar Retention Rate
Free Cash Flow
Non-GAAP Operating Margin
Paid Customers with more than $10,000 in ARR
Paid Customers with more than $100,000 in ARR
Non-GAAP Operating Income
Operating Cash Flow Margin
Summary, forecast, risks and KPIs are extracted from Figma, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.