Disclaimer: I use figma extensively and am very biased in my valuation of the company. I consider figma a work-of-an-art software with potential to break bounderies of product innovation. I also believe Figma to be a once-in-a-decade investment opportunity given their crazy potential, talent, and leadership. I also intend to purchase FIGMA stock. This is not an investment advice. Please consult your financial advisor before making any investment decisions. The article is for educational purposes.
My FIGMA Story
So far I have ideated an app, two websites, and made over $1500 doing design works with Figma. I have spend zero dollars on Figma so far, however, given an opportunity to spend, I won't hesitate. I am by no means a professional illustrator/designer, however, I posses simple drag and drop knowdlege. The more time I spend exploring Figma, the more I realize its potential. I have spend over 200 hours working in, and still have only barely touched the surface. With MCPs, I have increasingly seen Figma integrations in AI end-user applications like Claude and ChatGPT. I believe these integrations are goign to be game changers, for users, FIGMA the company, and also the AI apps that connect with Figma.
FIGMA Revenue and Customer Growth Story
Figma's growth story is impressive. The company went from $506mn in 2023 revenues to more than $1 billion annual run rate in 2025, an impressive doubling in under two years. Figma's most recent quarterly earnings puts quarter over quarter growth at 10%.
| Year | Revenue | Growth Rate (YoY) |
|---|---|---|
| 2023 | 506mn | - |
| 2024 | 749mn | 40% |
| 2025 | 1040mn (estimated) | 40% |
Revenue Scaling With Enterprise Customers
Figma's IPO filing gives a clearer picture on avenues of growth. Enterprise and large-scale customers are driving figma's impressive growth.
| Gross Retention Rate | 96% | Change since IPO Filing |
|---|---|---|
| Forbes Global 2000 Companies using FIGMA | 78% | |
| Forbes Global 2000 Companies with spending more than $100K annual | 24% | |
| Net Dollar Retention Rate | 131% | -1% |
| Customers spending $10,000+ with Figma | 12,910 | +993 |
| Customers spending $100,000+ with Figma | 1262 | +231 |
Table numbers above are the most recent data. Take a look at these images for details going back to 2023.
Figma went from 5945 paid customers to 12,910 paid customers in the $10,000+ range in two years, a 117% growth. The company's S-1 filing puts these customers as 64% of annual recurring revenue.
Figma went from 456 paid customers to 1,262 paid customers in the $100,000+ range in two years, a 176% growth. The company's S-1 filing puts these customers as 37% of annual recurring revenue.
Figma generates around 34% of ARR from its smaller clients
Figma generates 64% of revenue from customers spending more than $10K which also includes the cohort spending more than $100K annually. This deducts individuals and small businesses revenue segment to represent 34% of Figma's total ARR. Figma's highest ARR comes from it's biggest customers, which have nearly tripled in number in the past 2 years.
Discount Cash Flow Valuation of FIGMA (NYSE:FIG)
I use Prof. Aswath Damodaran's Valuation Spreadsheet for valuing ".com" companies to conduct this valuation exercise. Read his blogs here.
Two years ago, Adobe attempted to acquire Figma for $20 billion. When the deal collapsed, Figma walked away with a $1 billion breakup settlement—an incredible windfall for a company already on a rapid ascent. Since then, Figma has gone public, reached an all-time-high of $142 per share, and today trades around $34, hovering near its IPO price.
Despite the pullback, the business fundamentals are exceptional. Figma generated $274 million in its most recent quarter, surpassed $1 billion in annual recurring revenue(ARR), and reported $51 million in positive quarterly operating cash flow, according to its latest filings. In short: Figma is a profitable, billion-dollar-revenue SaaS company growing over 40% year-over-year—yet its stock trades as if none of that progress happened.
A combination of profitability, strong growth, and IPO-level prices is a rarity among modern software companies with Figma’s scale. It naturally raises the question: Is this my “investing early in Google” moment? As someone who uses and loves Figma’s products daily, my investment philosophy pushes me toward businesses I personally rely on.
To anchor that intuition in numbers, I built a DCF valuation of Figma to determine its rational long-term value. The results outline multiple scenarios that form the basis of my investment thesis—and help clarify where the market may be mispricing one of the most important design platforms of the decade.
Rationales For Figma Valuation
Everybody has their own version of investing early in Google or Apple or Microsoft. While I wasn't even born when these companies went public, in the case of Figma, I was using their software and actually making money. My early startup prototypes were made in Figma, and wiring things in Figma helped me tremendously in the deliberation process. I have kind of an infatutation for this company and given the stock price is below IPO prices, it's only natural to want to invest in software that I like and use often.
Figma crossed a billion dollar revenue mark and that means a lot for a pure software play. Given the company scales top line in the 25%-40% range for the coming decade, we are looking at a software firm thagt generates some 10 billion in annual revenues and has operating margins of 30-40% within a decade.
Here's some other rationales for conducting this valuation
- Figma has a strong balance sheet with more than $1.5bn in current assets and virtually zero debt
- Figma's growth rate is impressive at a 30-40% annual growth rate
- Figma has customers in all ranges, from individuals to small businesses and design firms to enterprises and corporations like Netflix and Duilingo.
- I have made money using Figma's design products with impressive customer satisfaction on the design output.
- I take Figma as a innovative software company that currently focuses on building cool design product. Their ethos is towards building collaborative tools that help build meaningful products. I easily see Figma building cool software that are not even thought of yet.
- Figma's MCP and collaborations with AI applications like ChatGPT and Claude will do them positive in terms of customer acquisiton and retention
- Figma is globally known and is building impressive brand value.
Explaining the valuation inputs
- Figma's annual Earnings Before Interest and Taxes (EBIT) is $250 million. I used the Net Cash Provided by Operating activities for 9 months ended 2025 and added $40mn extra to round up for the year of 2025 to reach this number.
- Figma's Capital Spending (CAPEX) stands at $217 factoring in the recent $200mn acquition of Weave AI and general Capital Expenditures of 17 million for 2025.
- Figma's Net Operating Loss Carried Forward stands at $1023mn , derived from recent SEC filings.
- Figma's Marginal Tax Rate is set at 25%, a common practice for profitable public companies in the long run. They could end up paying less.
- Figma's Current Beta is set at 1.35. I don't have a clear explanation for this. So take this with a grain of salt.
- Figma's current cost of borrowing is kept at a relatively high rate of 10% to keep valuation conservating. Also, the company is relatively new in public markets.
- Figma's revenue / top line growth rate is set at 30%. Figma has consistenyl growth above the 30% range, with recent YoY growth at 40%. Again, the number is personal, as we can't predict the future.
- I set Figma's long-term operating margins at 35% witha. 1.8 speed of convergence, meaning, the company will have 35% operating margins in the long run, however, it might tale them more than 5 years to do so. Figma has tremendous opportunities to Capex and conduct R&D which will significantly drive up their operating expenses. I believe in the management and they will eventually turn massively profitable.
One can tell I am biased in this valuation, and that's okay.
Final Thoughts
Figma builds exceptional software and is led by a strong, product-focused team. I use Figma often, and at today’s prices, I’m seriously considering investing.
My valuation estimates Figma’s intrinsic value at $82.03 per share, while the stock trades near $34—implying meaningful upside if the company continues executing with strong growth, profitability, and billion-dollar ARR.
This is not investment advice. Please consult a financial advisor before making any investment decisions.
