Figma dropped 17% after earnings, but Artemis says the market is still looking at the company too narrowly
Figma shares fell 17% after the company reported second-quarter 2026 earnings on Aug. 5. In a post-earnings review, Artemis Analytics argued that investors are still treating Figma like a company that simply sells more seats to designers, while missing a much larger shift in how software is built.
The quarter was strong by the numbers. Revenue came in at $370.1 million, up 48% year over year. Net dollar retention was 136%. GAAP gross profit reached $309.6 million, with a GAAP gross margin of 84%. GAAP net loss was $112.2 million, driven mainly by $147.6 million in stock-based compensation expense. Figma also ended the period with 15,964 paying customers with annual contract values above $10,000, up 34%, and 1,635 paying customers with annual contract values above $100,000, up 46%.
Product engineers are blurring the line between design and development
Artemis says Figma’s next phase is tied to the rise of the product engineer. The term has been popularized by Sherif Mansour, Jean-Michel Lemieux and Gergely Orosz, and refers to people who write code, understand customer pain points and help shape the product.
AI is making software development easier. As the cost of writing code falls, engineers are taking on more product and design work, and the boundary between those roles is starting to blur. Artemis says that matters for Figma because engineering teams have historically been much larger than design teams. One of Figma’s largest customers already has more engineering seats than design seats, and the firm expects that pattern to become more common.
The note also points to Google Trends data, saying searches for “product engineer” have risen materially over the past few years.
Figma Agent could move the business from seat pricing to usage pricing
The second part of Artemis’ thesis centers on agents. In a traditional SaaS model, revenue is simple: seat price multiplied by seat count. In an agentic world, the firm expects each employee to have one or more agents working on their behalf.
Those agents could help iterate products, edit components and turn mockups into code. That work consumes inference and compute. Artemis says the next SaaS pricing model may become a mix of seat-based charges and usage-based charges, expressed as seat cost multiplied by seat count, plus consumed credits multiplied by per-credit cost.
In its view, Figma will continue charging for the people using the product and also for the work completed through the product. The note names Figma Make, Figma Agent, Figma Weave and Figma MCP as part of that AI suite.
AI spend may be turning into revenue instead of cost
Artemis also focused on margins. AI is expensive, and compute and inference costs are a major burden for companies trying to ship AI products. When Figma launched Figma Make, gross margin fell from 90% to 80% because inference started showing up in cost of revenue.
By the second quarter of 2026, however, non-GAAP gross margin had recovered to 85%, because Figma began charging for AI usage through credits. Artemis says what it and Wall Street expected to be a cost may instead become an additional revenue stream.
The firm believes margins could continue to expand as Figma keeps monetizing its AI product stack.
The main risk is that AI tools could replace the design-to-code workflow
Artemis does flag a risk. If tools from companies such as Claude and OpenAI become powerful enough, they could collapse the entire design-to-code workflow. In that scenario, a user could describe the look and feel of a product in natural language and deliver the final output end to end, which would put Figma at risk.
Still, the note says that outcome is far from reality, or at least not likely in the near term. Figma already has customers, those customers know the tool and have built workflows around it, and years of design systems are embedded in the platform. That installed base is a significant moat, according to Artemis.
Why Artemis thinks the market has mispriced Figma
Artemis argues that the market is still pricing Figma as software for designers, even though the company may be moving toward being the design layer for all software creators and AI agents.
The note gives three reasons it thinks the stock is mispriced. First, Q2'26 revenue still grew by more than 40% year over year, suggesting that Figma remains in use even as Claude-related tools gain traction. Second, net dollar retention of 136% points to continued seat expansion. Third, Figma was trading at 7.3 times EV/ARR, close to historical lows.
The firm says the bullish case is no longer just about more designers paying for more seats. It is about more creators using Figma, more agents operating through Figma and more AI usage being monetized on top of that base. If that plays out, Artemis says, Figma’s TAM is much larger than the market is pricing today.