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 per cent range over the past year, down from above 90 per cent historically.

The company is betting that boosting AI adoption, even at the cost of margins, will help expand its user base at a time when increasingly capable AI models threaten to disrupt demand for traditional software.

Earlier this year, Figma moved to a usage-based pricing model for AI credits on its platform, and has said the monetization effort will help deliver stronger earnings in the upcoming quarters.

Investors, however, have been scrutinizing shrinking margins and free cash flow 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 per cent 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."

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