Figma shares plunge as earnings miss lofty post-IPO expectations

Sept 4 (Reuters) - Figma's shares FIG.N fell more than 15% in premarket trading on Thursday following a modest first-quarter earnings beat that fell short of the sky-high expectations set by its blockbuster July stock debut.

The cloud-based collaborative design software platform's widely watched IPO set a high bar, and with shares now sharply off their peak, investors are reassessing the company's valuation amid volatility and looming share unlocks.

Figma's IPO was priced at $33 per share, giving the company a valuation of $19.34 billion. The stock surged 250% on debut, marking a standout entry to public markets.

It is set to lose about $5 billion on Thursday from its $33.2-billion market capitalization, if premarket losses hold, with shares off more than 52% from their peak as of Wednesday's close.

"(The stock move) reinforces the notion that volatility could remain elevated near-term. We advise large-cap growth investors opportunistically add to positions," said Brent Bracelin, senior research analyst at Piper Sandler.

Figma reported second-quarter revenue of $249.6 million, up 41% from a year earlier and slightly ahead of the $248.8 million consensus. Adjusted earnings per share came in at $0.09, edging past the $0.08 per share estimate.

Adding to the pressure, the company disclosed that the lock-up period for certain employees would expire later this week, potentially increasing share supply. Meanwhile, five major venture capital holders remain under an extended lock-up, with staggered releases through mid-2026.

With just 41% of its outstanding shares available as free float, Figma's stock is especially prone to volatility, as limited liquidity tends to amplify price movements.

The design software platform's shares trade at 299.2 times profit expectations, several times the 15.3 price-to-earnings multiple of legacy competitor Adobe ADBE.O and 23.7 for the broader S&P 500 index .SPX.

While analysts are optimistic about Figma's long-term growth, near-term volatility is expected to persist as the company navigates pricing changes, AI integration and investor scrutiny.