When a stock jumps 13% in the session after earnings day, and the analyst covering it still cuts the price target, something interesting is happening, and you may want to dig beneath the surface. That is exactly the situation unfolding at Figma (FIG) right now.
The design software company delivered a first-quarter 2026 earnings report that caught Wall Street off guard. Revenue were up 46% year over year, customer retention at its highest level in two years, and AI adoption metrics that directly challenge the narrative that AI tools are eating Figma’s lunch rather than expanding its market.
Goldman Sachs reviewed the results in a note shared with me at TheStreet. Goldman’s message is that the quarter was genuinely good, the AI monetization story is emerging, but the competitive threat from AI-native design tools is real enough to warrant caution on the multiple.
Goldman Sachs downgrades Figma stock price target to $30 from $35
Goldman Sachs maintained its Neutral rating and lowered its 12-month price target to $30 from $35, while simultaneously acknowledging the results were stronger than expected. At $22.92, that $30 target implies roughly 48% upside.
The first-quarter scorecard, according to Figma’s May 14 earnings release:
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Revenue of $333.4 million, up 46% year over year, accelerating from 40% in Q4 2025 and 38% in Q3 2025
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Non-GAAP operating income of $52.1 million, with a 16% non-GAAP operating margin
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Free cash flow of $88.6 million, representing a 27% free cash flow margin
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Net Dollar Retention Rate of 139%, up three percentage points from the prior quarter, the highest in over two years
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Paid customers with more than $100,000 in Annual Recurring Revenue (ARR) grew 48% year over year
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Total paid customers grew 54% year over year to approximately 690,000
Source: Figma First Quarter 2026 Financial Results
Goldman noted in the shared note that revenue came in 5% above Street estimates, EBIT margins were approximately 650 basis points above expectations, and second-quarter revenue guidance sits 6% above consensus. Full-year 2026 guidance was raised by $55 million.
“Q1 was an incredible quarter for Figma,” said co-founder and CEO Dylan Field. “When code is a commodity, design is the competitive edge – the craft, point of view, and human judgment that make a great product rise above the rest.”
The AI monetization data is the story Goldman most wants investors to focus on
The competitive fear hanging over Figma for the past year has been this. If AI agents can generate designs and code automatically, do teams still need Figma’s collaborative design platform? The Q1 data is beginning to answer that question, and the answer is more favorable than bears expected.
