Figma (FIG) Q4 FY12/25 Earnings Review

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Abstraction Redux

by Alex King, CEO, Cestrian Capital Research, Inc

If you want a really big user base for your digital product, abstraction is the key. The further the UI is from the machine code, the more users will use it, all other things being equal. And the less skilled those users are, and oftentimes the more they will pay for your thing to do the difficult stuff between “ooh nice colors, can you make it a bit more square” and the ole 110111010011111.

Figma was due to be acquired by Adobe for $20bn a couple years back, because it offered ADBE a whole new product set, one which helps customers create digital products in a very easy-to-use, no-code kind of way. This deal was nixed on antitrust grounds which led to $FIG going public, since when the stock has been a disaster, opening its IPO day trading at $85, mooning to $142 and then dumping to an all-time low a shade under $20 earlier this month.

In part the sell-off has been sector-driven (everyone hates software now) and in part it seems like FIG offers exactly the kind of toolkit that Claude & Co will disrupt.

Earnings yesterday started to change that narrative; FIG has partnered with Anthropic and is positioning itself as an abstraction layer over Claude; so, you draw the good colors in Figma, Figma creates the prompts for Claude, and Claude creates the code. I think this may work; it gets Claude more users, albeit indirect, and it means Figma can create more high-level functionality without having to worry about how to handle the no-code aspect itself.

The numbers were good, and the stock, which had already started to be accumulated I think, has responded well so far.

Here’s how it looks: