Episode Details

Figma, Inc. (FIG) Q2 2026 — Q2 revenue $370.1M, up 48.2% YoY and above the top of the $348-350M guide. Non-GAAP EPS $0.08 vs a ~$0.04 bar - but GAAP EPS was MINUS $0.21 (a $112.2M net loss) after $147.6M of stock compensation, 39.9% of revenue. Net dollar retention 136%. Full-year revenue guidance RAISED $40M to $1.463-1.467B. Q3 guided to $373-375M, +36% YoY but only +1.1% sequentially. Stock -14.85% to $23.97. The bar was RAISED, not cut - we checked. Figma beat and raised, and the stock fell 14.85%. This episode is about why. First, the earnings number: the $0.08 everyone quotes is NON-GAAP. GAAP was MINUS $0.21, a $112.2M net loss, because $147.6M of stock compensation - 39.9% of revenue, against 2.9% a year ago - is added back. It is not a non-cash mark; equity losses were only $4.4M. Second, billings grew 33.7%, not 48.2%: deferred revenue FELL $0.9M in the quarter, so billings were $369.2M against $276.2M - and the Q3 guide of +36% sits on the billings line, not the revenue line. Sequential growth ran +10.2%, +10.5%, +9.8%, +11.0% and is guided to +1.1%. Third, the RSU overhang is GROWING: unvested units went 53,240K to 65,484K in six months because Figma granted 28,113K at an average $20.69 while only 9,428K vested, with $1.4B of unrecognised stock compensation still to come over 3.4 years and shares outstanding compounding at 6.95% a year. Fourth, reported free cash flow of $53.2M is BELOW last year's $60.6M on 48% more revenue - and net of the $45.5M of cash tax paid on vesting RSUs it is $7.7M, or MINUS $19.8M for the half. Fifth, cost of revenue grew 116.8% against 48.2% revenue growth and gross margin fell from 88.8% to 83.7%: AI credits are buying revenue with gross margin. THE CALL: AVOID (3/5, A GOOD QUARTER, AND YOU ARE ALREADY PAYING OUR BULL CASE) — base-case value ~$18.0 vs ~$23.97 today. KEY METRICS: - CALL: AVOID 3/5, fair value ~$18 vs the $23.97 tape (-25%). Street: 8 analysts, Hold, $30.17 avg target. We DIFFER. - Rev $370.1M +48.2%, above the $348-350M guide. Non-GAAP EPS $0.08; GAAP MINUS $0.21. NDR 136%. FY raised $40M to $1.465B. - 530,572,000 shares at $23.97 = $12.7B cap (not $11.7B). EV $11.0B = 7.5x the $1.465B guide; 145x owner free cash flow. What to watch: UP: a Q3 print above $385M, which would mean the +1.1% sequential guide was sandbagging; billings growth re-accelerating above reported revenue; or gross margin stabilising near 85%. BEAR: net dollar retention slipping below 130%, another quarter of unvested RSUs growing, or a Q4 under the implied $387.5M. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.