FIG Ahead of Earnings

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Elephant Earnings specializes in sharp and insightful earnings report analysis. With a focus on uncovering the truth behind the numbers
 

•  18 Feb 2026
 

•   ADBE  
   
  +0.70%
•   FIG  
   
  -2.06%

$FIG reports fourth-quarter results with the stock down roughly 71% from post-IPO levels and trading near $23, below the $33 offering price and nearly 85% off the $143 intraday high set days after listing. The surface narrative centers on AI partnerships and sentiment recovery. The real question for institutional capital is whether growth durability justifies a near-90x forward earnings multiple in a market that has repriced duration risk across SaaS.

Consensus calls for approximately 35% year-over-year revenue growth to $293 million, with adjusted EPS of $0.06–$0.07 and a sizable GAAP loss tied largely to stock-based compensation post-IPO. In isolation, 35% growth is not distressed. The divergence is between healthy top-line expansion and sustained multiple compression. That gap reflects skepticism around terminal growth, margin structure, and competitive positioning in an AI-disrupted workflow stack.

The sector backdrop matters. Software multiples broadly reset over the past year, and $ADBE is down more than 25% over the same period. This is not a single-name issue. However, $FIG still trades at a premium growth valuation despite its drawdown. That implies the market is pricing structural advantage, not cyclical resilience. Into earnings, guidance will drive repricing more than the backward-looking quarter.

The core metric to monitor is enterprise depth, specifically customers generating over $10,000 in annual recurring revenue. That cohort grew 45% in 2024 to more than 10,500. If that trajectory sustains, it signals standardization inside product organizations rather than discretionary tool usage. For sophisticated investors, this is the leading indicator of pricing power and renewal leverage. If growth in high-ARR customers decelerates meaningfully, the valuation framework resets lower regardless of AI narrative strength.

Management positioning around partnerships with OpenAI and Anthropic, including the “Code to Canvas” workflow, reframes $FIG as an AI beneficiary rather than a victim. The strategic logic is sound. The monetization pathway remains unproven. The Street will look for evidence that AI-native tools such as Figma Make expand paid seats, increase usage-based billing, or lift net revenue retention. Engagement metrics without ARPU expansion do not support 90x forward earnings in a risk-adjusted model.

Another divergence sits between user mix and revenue capture. Two-thirds of monthly active users now come from non-traditional design backgrounds, expanding total addressable market optics. The investment question is whether that broader base converts into enterprise contracts or dilutes monetization through lower-value tiers. In a tightening budget environment, design collaboration must demonstrate workflow criticality, not optional enhancement.

From a technical standpoint, the stock has been in a prolonged post-IPO distribution phase, with volatility clustering around earnings prints. That pattern suggests event-driven positioning rather than long-only accumulation. If positioning is light and expectations muted, in-line results with stable FY guidance could trigger a reflex rally driven by short covering and multiple stabilization. If guidance implies growth slipping into the mid-20% range, risk/reward skews negatively given the embedded premium multiple.

The aborted $20 billion acquisition by $ADBE remains an anchor in valuation discussions, but markets do not price nostalgia. At a current market cap near $11.7 billion, $FIG trades well below that prior strategic valuation, yet still at levels that assume durable competitive advantage versus both incumbents and emerging players such as Canva. Competitive intensity and pricing discipline will determine whether this is a secular winner or a high-quality asset caught in structural compression.

The timing variable is forward visibility. Billings growth, deferred revenue trends, and the width of FY guidance ranges will determine whether institutional money steps back in or continues to underweight. In a tape that penalizes uncertainty, credible evidence of monetized AI integration and sustained enterprise expansion can stabilize the multiple. Absent that, the stock 71% decline from peak may represent only partial repricing of duration risk rather than a definitive bottom.

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