In February, the SaaS sector s-To The Moon - Tiger Brokers Online Investing Community - To The Moon

In February, the SaaS sector saw roughly $285 billion in market cap erased, yet $Figma(FIG)$ Q4 revenue growth accelerated from 38% to 40%, achieving counter-cyclical reacceleration amid broad industry slowdown. Despite strong earnings, the stock surged 16% in after-hours trading before reversing and closing off highs. Figma is still down 36% year-to-date.

A key metric: 136% net dollar retention (NDR), the highest in nearly 10 quarters. This indicates existing customers are not only staying but meaningfully increasing spending.

AI monetization is another critical variable. The company plans to begin charging for AI features in March, supported by high engagement from large enterprise customers. Management emphasized that AI will enhance—not replace—Figma’s core design workflow, reinforcing a closed-loop between tooling capability and creative output.

Risks remain:

Elevated stock-based compensation (SBC), creating dilution pressure
Rising AI compute costs, with gross margin declining from 92% to 86%
Potential selling pressure from lockup expirations

Overall, Figma appears to be undergoing a valuation reset of a high-quality asset. If AI monetization stabilizes margins while sustaining 30%+ growth, its roughly 10x EV/Revenue multiple may have room for re-rating. A return to a $20B valuation will depend on whether profitability scales alongside growth.

Figma Beats But SaaS Lags: Time to Buy After Strong Earnings?

Figma delivered 40% Q4 revenue growth to $303.8M, beating expectations, with adjusted EPS of $0.08 vs. $0.06 consensus. Shares jumped nearly 16% premarket. Guidance impressed even more: Q1 revenue of $315M–$317M and FY2026 revenue of up to $1.374B—well above estimates. AI traction is accelerating, with Figma Make weekly active users up 70% QoQ. Partnerships with Anthropic and OpenAI reinforce its platform positioning. Is Figma proving AI enhances? A buy after the strong earnings?

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Shares jumped nearly 16% premarket. Guidance impressed even more: Q1 revenue of $315M–$317M and FY2026 revenue of up to $1.374B—well above estimates.\nAI traction is accelerating, with Figma Make weekly active users up 70% QoQ. Partnerships with Anthropic and OpenAI reinforce its platform positioning.\nIs Figma proving AI enhances? \nA buy after the strong earnings?","image":"https://community-static.tradeup.com/news/52bfa7dbb6bfeca52b5aa3cea7b14ef8"}],"images":[],"coverImages":[],"html":"<html><head></head><body><p>In February, the SaaS sector saw roughly <strong>$285 billion in market cap erased</strong>, yet <a data-mention-id=\"FIG\" class=\"teditor-mention\" data-mention-name=\"Figma\" href=\"https://ttm.financial/S/FIG\">$Figma(FIG)$</a> Q4 revenue growth accelerated from <strong>38% to 40%</strong>, achieving counter-cyclical reacceleration amid broad industry slowdown. Despite strong earnings, the stock surged 16% in after-hours trading before reversing and closing off highs. 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If AI monetization stabilizes margins while sustaining 30%+ growth, its roughly 10x EV/Revenue multiple may have room for re-rating. A return to a $20B valuation will depend on whether profitability scales alongside growth.</p></body></html>","htmlText":"<html><head></head><body><p>In February, the SaaS sector saw roughly <strong>$285 billion in market cap erased</strong>, yet <a data-mention-id=\"FIG\" class=\"teditor-mention\" data-mention-name=\"Figma\" href=\"https://ttm.financial/S/FIG\">$Figma(FIG)$</a> Q4 revenue growth accelerated from <strong>38% to 40%</strong>, achieving counter-cyclical reacceleration amid broad industry slowdown. Despite strong earnings, the stock surged 16% in after-hours trading before reversing and closing off highs. Figma is still down <strong>36% year-to-date</strong>.</p>\n<p>A key metric: <strong>136% net dollar retention (NDR)</strong>, the highest in nearly 10 quarters. This indicates existing customers are not only staying but meaningfully increasing spending.</p>\n<p>AI monetization is another critical variable. The company plans to begin charging for AI features in March, supported by high engagement from large enterprise customers. Management emphasized that AI will enhance—not replace—Figma’s core design workflow, reinforcing a closed-loop between tooling capability and creative output.</p>\n<p>Risks remain:</p>\n<ul style=\"\">\n <li>\n  <p>Elevated stock-based compensation (SBC), creating dilution pressure</p></li>\n <li>\n  <p>Rising AI compute costs, with gross margin declining from 92% to 86%</p></li>\n <li>\n  <p>Potential selling pressure from lockup expirations</p></li>\n</ul>\n<p>Overall, Figma appears to be undergoing a <strong>valuation reset of a high-quality asset</strong>. If AI monetization stabilizes margins while sustaining 30%+ growth, its roughly 10x EV/Revenue multiple may have room for re-rating. A return to a $20B valuation will depend on whether profitability scales alongside growth.</p></body></html>","text":"In February, the SaaS sector saw roughly $285 billion in market cap erased, yet $Figma(FIG)$ Q4 revenue growth accelerated from 38% to 40%, achieving counter-cyclical reacceleration amid broad industry slowdown. Despite strong earnings, the stock surged 16% in after-hours trading before reversing and closing off highs. Figma is still down 36% year-to-date. A key metric: 136% net dollar retention (NDR), the highest in nearly 10 quarters. This indicates existing customers are not only staying but meaningfully increasing spending. AI monetization is another critical variable. The company plans to begin charging for AI features in March, supported by high engagement from large enterprise customers. Management emphasized that AI will enhance—not replace—Figma’s core design workflow, reinforcing a closed-loop between tooling capability and creative output. Risks remain: Elevated stock-based compensation (SBC), creating dilution pressure Rising AI compute costs, with gross margin declining from 92% to 86% Potential selling pressure from lockup expirations Overall, Figma appears to be undergoing a valuation reset of a high-quality asset. If AI monetization stabilizes margins while sustaining 30%+ growth, its roughly 10x EV/Revenue multiple may have room for re-rating. 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