Figma CFO says design platform willing to put margins on the line to boost AI demand

BENGALURU, Oct 15 — Figma's CFO said on Thursday it was uncertain if ​the design software firm would return to peak gross margin levels as it ramps up AI spending, but said the investments will help draw users and ‌better compete with sophisticated tools from labs such as OpenAI and Anthropic.

The company has been spending heavily on AI features, ⁠including its Figma design assistant and tools ​that can create prototypes and web applications ⁠using text prompts, which have helped drive a steady surge in revenue, but weighed ‌on margins.

"Are we going to ‌get back to the low-90s gross margin percentage? I don't know. But ⁠is that the thing I would be acutely focused ⁠on? No," CFO Praveer Melwani told the Reuters Global Markets Forum on the sidelines of the company's Config user conference in Bengaluru, India.

Figma's quarterly gross profit margins have shrunk to the mid-80% range over the past year, down from above 90% historically.

The company is betting that sacrificing margins now to boost AI adoption will help ‌expand its user base and eventually give it room to ​raise prices.

Figma earlier this year moved to a usage-based pricing model for AI credits on its platform. The monetization effort is expected to deliver stronger earnings in the upcoming quarters.

Investors, however, have been scrutinizing finances at tech companies as they assess the returns on costly AI bets. Those concerns, coupled with worries over AI-driven disruptions, have dragged Figma's stock down about 43% this year.

"I would be willing to take the hit ​on margin the same way that we did over the last year if it means that we're ‌able to serve ‌a much ⁠larger total addressable market," Melwani said.

"What may be good for us may not always be what an investor is looking for... We know we're going to have the ability to take price at the right point."

At Config India, Figma announced expanded access to its code layers ‌tool, new collaborative features, and ​partnerships with agent platforms including OpenCode, Meta Muse ‌and India's Sarvam AI.

(Join GMF, ⁠a chat room ​on LSEG Messenger for live interviews: https://lseg.group/3KFHrhe)

(Reporting by Deborah Sophia in Bengaluru; Editing by Perla Velasco and ​Mrigank Dhaniwala)

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