Figma warns of upcoming share unlock as stock sinks post-earnings

Investing.com — Figma Inc (NYSE:FIG) shares fell sharply in after-hours trading Wednesday following the company’s second-quarter earnings report that missed Wall Street’s profit expectations despite delivering record revenue. Investors also grappled with news of an impending early lock-up share release, sending the stock down 10.6% in extended trading on Tuesday.

The design software company posted earnings per share of $0.00 for the three months ended June 30, missing analysts’ consensus estimates by $0.08. Revenue came in at $249.6 million, slightly ahead of the $248.7 million expected, representing a 41% year-over-year increase.

Key operating results underscored Figma’s expanding user base and monetization efforts. Net income totaled $28.2 million, while adjusted free cash flow reached $60.6 million, amounting to a robust 24% margin.

“This was another strong quarter for Figma,” CEO Dylan Field said in the company’s press release. “We delivered record revenue in Q2 as we continued to innovate with the launch of four new products.”

The company’s Net Dollar Retention Rate among customers with $10,000 or more in annual recurring revenue hit 129%, reflecting higher customer engagement across its product suite. CFO Praveer Melwani noted, “We delivered best-in-class revenue growth and positive operating margin as we kept investing in AI and expanded our platform.”

Figma’s upcoming early lock-up expiration will allow certain employee-held shares to be sold beginning September 5, 2025, potentially adding selling pressure in the near term. While 25% of eligible employee shares are expected to be unlocked following the earnings release, a separate extended lock-up agreement among major holders remains intact through at least mid-2026.

Looking ahead, Figma raised full-year revenue guidance to a range of $1.021 billion to $1.025 billion, above the $1.01 billion previously expected by analysts. Third-quarter revenue is expected to hit $263 million to $265 million, implying 33% growth year over year.

Despite robust financial performance and raised guidance, investor reaction suggests heightened sensitivity to share supply dynamics in the wake of IPO lock-up releases. With strong fundamentals and continued product expansion, sentiment now hinges on whether share overhang will weigh on near-term price action.

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