Episode summary
Can Figma Be a Multi-Bagger After Its 80% Decline?
The Intrinsic Value Podcast
· · Hosts: Shawn O'Malley, Daniel Mahncke
Summary
Figma is presented as a fast-growing design software company whose stock has been punished after its IPO, even though the business has continued to expand and broaden its product set. The hosts argue that the market may be underestimating how much Figma has already changed collaborative design, turning a siloed workflow into a cloud-native, real-time process that works for designers, engineers, and product managers alike.
A major part of the case is Figma’s transition from a single flagship product into a broader platform. The discussion highlights FigJam, Figma Slides, Dev Mode, and newer AI-heavy products like Figma Sites, Figma Make, Figma Buzz, Figma Draw, and Figma Weave. The hosts argue that this ecosystem could make Figma more durable, because plugins, integrations, and user-built workflows may create a compounding moat rather than a narrow product that can be replaced by AI.
The episode also covers the company’s pricing and monetization changes. Figma has shifted toward admin-approved upgrades, larger seat bundles, and a 30% increase for full seats, which may improve enterprise visibility but could slow the viral growth loop. The hosts note that Figma’s 131% net dollar retention for customers spending over $10,000 annually looks strong, but may be stale because it mostly reflects data before the billing change.
Finally, the episode frames Figma’s strategic challenge as a balance between Adobe competition and AI disruption. The hosts think AI may strengthen Figma if it becomes a platform for AI tools instead of a victim of them, but they also note that inference costs, consumption-based pricing, and changing enterprise software economics could pressure future margins.
Key takeaways
- The hosts think Figma’s biggest strength is its collaborative workflow, which made design editing feel more like Google Docs than legacy software.
- They argue Figma’s plugin ecosystem and newer products make it look more like a platform than a single-product company.
- Figma Make was described as impressively capable, with one host saying he built a meditation app from a couple of sentences of input.
- The hosts say Figma’s 131% net dollar retention is strong, but the figure may not tell investors much about the post-billing-change future.
- They see the shift to admin approvals and bundled seats as a tradeoff: better enterprise control, weaker bottom-up virality.
- The discussion suggests Figma could be more resilient to AI than feared if AI is embedded inside its workflow rather than used to bypass it.
Notable quotes
“the equivalent of Google Docs, but for graphic design”
“the company has unveiled a really impressive suite of products and maybe the most impressive generative AI tool for building apps that I've seen”
How the episode opens
0:00Overhyped IPOs are not a new phenomenon, 0:022 secondsbut when the market discards a growing business because it was priced very ambitiously, perhaps that creates opportunities for us. Well, I would 0:1010 secondsthink so. Nearly 4 years ago, Adobe was trying to buy Figma for nearly twice the valuation that the public markets now 0:1717 secondsvalue Figma at.
And yet, during that time, the company has unveiled a really impressive suite of products and maybe the most impressive generative AI tool for building apps that I've seen. 0:2828 seconds 0:3333 secondsIn light of SAS magetta, everyone is asking themselves whether this is a generational buying opportunity for software stocks or a value trap in an 0:4242 secondsindustry that's about to be hugely disrupted by the advancements LLM have made in coding, significantly lowering the barriers to software creation and 0:5050 secondspotentially eating into the modes of businesses that were until recently considered some of the best in the history of capitalism. ISM.
0:5959 secondsOh man, it's a good setup. A lot of people in particular are asking questions about Adobe's ability to generate excess returns going forward 1:061 minute, 6 secondsconsidering just how good generative AI content for images and videos has gotten and has gotten really really good. And and so today's pitch though won't be for 1:151 minute, 15 secondsAdobe even though we've covered it numerous times in in-depth discussions in our intrinsic value community with 1:231 minute, 23 secondsmembers there.
I'm actually interested in going through the business of one of Adobe's biggest emerging competitors in Figma. And my hope is that doing so will 1:321 minute, 32 secondsnot only help us better understand the implications of AI on the creative design industry, but also Figma as a company is interesting because you know 1:401 minute, 40 secondsthey had one of the hottest IPOs in recent memory last year in August only for the stock to be down 80% since then.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- figma platform expansion
- ai design disruption
- competitive pressure from adobe
- ipo decline and accounting
- intrinsic value portfolio review
Companies and tickers mentioned
- FIG
- ADBE
- Figma Inc.
- Adobe
Watch the episode
Watch “Can Figma Be a Multi-Bagger After Its 80% Decline?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from The Intrinsic Value Podcast
-
Canadian Pacific Kansas City Limited (CP.TO): Irreplaceable Moat, Unproven Compounding -
Reddit (RDDT): Record Cash Flow, Collapsing Share Price -
McDonald's ($MCD): Generational Compounder in Historical Drawdown -
Mercado Libre ($MELI): We Doubled Down on Meli! -
Airbnb (ABNB) The Business Outgrew Its Peak, the Stock Hasn't -
GE Aerospace: The Ultimate Compounder?
The Intrinsic Value Podcast, this episode and its artwork belong to The Investor's Podcast Network. Octagon is not affiliated with the show; this page is an independent summary.
