Figma’s first financial report as a public company showed a slight beat on second-quarter profit and revenue, but fell short of AI and tech investors’ expectations, causing shares to drop 13%. The company’s strategy to cover all aspects of product development attracted big names like Netflix, but its high valuation led to disappointment among investors.

Despite a 41% revenue increase to $249.6 million in the second quarter, Figma’s shares have dropped over 40% since its debut. The company’s adjusted earnings per share of 9 cents surpassed estimates of 8 cents. Figma’s aggressive rollout of new features, including an AI-powered product, aims to attract and retain subscribers.

Figma’s fiscal 2025 revenue is expected to be between $1.02 billion and $1.03 billion, slightly higher than analysts’ estimates of $1.01 billion. As the lock-up period for certain employees ends this week, senior executives will have to hold their shares until later in the year.

Analysts suggest that Figma’s high valuation was based on potential and story, leading to disappointment when management’s outlook didn’t meet expectations. The company’s stock price, which surged 250% on its first day of trading, has since declined significantly. Figma’s new products and revenue growth attracted investors initially, but maintaining momentum will be crucial.

Read more at Yahoo Finance: Figma’s first earnings report after stellar debut underwhelms investors