What paying in equity actually costs: Figma's Q2, read line by line

Short answer: Figma reported a GAAP operating loss of $117,289 thousand for the three months to 30 June 2026 and, on its own presentation, non-GAAP operating income of $36.1 million. Both are correct. The distance between them is almost entirely stock-based compensation of $147,554 thousand, a charge larger than the loss itself. Read across to the cash flow statement and the same charge is added back as non-cash, $316,552 thousand for the half. Read four lines further, into financing activities, and $161,648 thousand of cash went out in that same half to pay tax on those awards. That is 51.1% of the add-back. This file follows one mechanism through one company's filings, and then draws out what it means for a company a hundredth of the size.

1 · The charge is bigger than the loss

Start with the number everyone quoted. Figma reported a loss from operations of $117,289 thousand against operating income of $2,076 thousand a year earlier. In the same quarter it recorded $147,554 thousand of stock-based compensation, net of amounts capitalised, against $7,310 thousand a year earlier. The charge grew 20.2 times. It is larger than the loss.

Add the charge back and the quarter shows operating income of $30,265 thousand. That is arithmetic, not a proposed measure, and the company does not present it that way. The point is what it tells a reader: this is not a business whose customers fail to cover its costs. It is a business issuing a large amount of equity to its people and recognising the value of that equity as expense. Those are different conditions with different remedies, and the operating line alone does not distinguish them.

2 · Where the overhead line went

Of the three operating expense lines, general and administrative grew fastest: from $38,922 thousand to $104,715 thousand, up 169.0%. Research and development rose 101.5% and sales and marketing 58.5%. A near tripling of administrative cost is the kind of line that draws a question from a board about discipline.

General and administrative rose $65,793 thousand. Stock-based compensation recorded inside that line rose $64,317 thousand, from $609 thousand to $64,926 thousand. That is 97.8% of the increase. Everything else in the line moved by $1,476 thousand. The honest description of the quarter is not that overhead ran away. It is that a compensation decision landed in an overhead line, and the only place that is visible is a footnote.

3 · The non-cash charge that cost cash

This is the part of the mechanism that costs companies real money and real credibility, and it is the reason this file exists.

Stock-based compensation is added back in the cash flow statement because no cash leaves when an award vests. For the six months to 30 June 2026 that add-back was $316,552 thousand. Four lines further down the same statement, inside financing activities, sits Taxes paid related to net share settlement of equity awards of $161,648 thousand. The comparative for the prior half is nil.

The mechanism is ordinary. When an award vests, the employee owes income tax. Rather than have them sell shares to pay it, the company withholds shares and remits the tax in cash itself. The expense is non-cash. The settlement of it is not. Here, cash equal to 51.1% of the add-back went out of the door to do exactly that, and because it is classified as financing rather than operating, it does not touch operating cash flow or free cash flow as commonly computed.

So a reader following operating cash flow sees a business generating $158,201 thousand in the half. A reader following the full statement sees $161,648 thousand leaving to settle equity awards over the same period. Neither figure is wrong. They answer different questions, and only one of them is usually quoted.

4 · Revenue grew 47% and operating cash flow did not

For the six months to 30 June, revenue rose from $477,839 thousand to $703,522 thousand, up 47.2%. Net cash provided by operating activities moved from $159,632 thousand to $158,201 thousand, down 0.9%.

Cash generation is real and positive, and the company reported free cash flow of $53.2 million for the quarter on its own definition. The observation is about the relationship rather than the level. Half again as much revenue produced very slightly less operating cash, and the components sit in the same statement: accrued compensation and benefits fell $43,635 thousand over the half, and deferred revenue contributed $31,449 thousand against $51,784 thousand a year earlier. A compensation cycle and a billing cycle are both inside that number.

5 · The cost of serving the product

Leaving compensation aside, one other line moved in a way that changes the shape of the business. Revenue grew 48.2% in the quarter. Cost of revenue grew 116.8%, from $27,889 thousand to $60,472 thousand.

Gross margin moved from 88.83% to 83.66%, a fall of 517 basis points. The company reports GAAP gross margin of 84% and describes the quarter as its first full quarter of AI credit monetisation. For any software business, gross margin is where a new product line states whether it carries the old unit economics. A 517 basis point move in twelve months is a change in the cost base, not a rounding difference, and the next few quarters of that line will show whether it settles.

6 · Two sentences, two pages apart

The release opens by describing the third straight quarter of accelerated year-over-year growth, which the numbers support: revenue grew 48.2%. The outlook section of the same document guides third quarter revenue to between $373.0 million and $375.0 million. Third quarter revenue a year earlier, from the Form 10-Q for the quarter ended 30 September 2025, was $274,173 thousand. The midpoint implies about 36.4% growth, which the company states itself.

Both sentences are accurate. Acceleration to 48.2% is history. The 36.4% is the guide, roughly 11.8 percentage points lower. Nothing is concealed. It is simply that the sentence a reader remembers and the number a reader should carry forward are not the same one, and they sit two pages apart in the same file.

7 · What the prior year's profit was made of

The comparison framing the quarter is a swing from net income of $28,227 thousand to a net loss of $112,152 thousand. It is worth asking what the earlier profit consisted of. In the June 2025 quarter, income from operations was $2,076 thousand, which is 7.4% of that net income. The remainder came below the operating line: other income, net of $36,978 thousand, which included unrealised gains on equity investments.

In the June 2026 quarter other income, net was $7,614 thousand, down 79.4%, with unrealised losses on equity investments of $4,408 thousand where the prior period had gains of $22,121 thousand. Part of the year-on-year swing in the bottom line is therefore a swing in investment marks rather than in trading. The company also carries digital assets, $15,820 thousand current and $10,115 thousand non-current at 30 June 2026, and recorded a remeasurement loss on the non-current holding of $5,001 thousand in the half.

8 · A note on reading the insider filings

Through August the share price narrative was a lock-up release. It is worth a short section because it demonstrates a reading skill rather than a finding: the share counts that circulate in a lock-up week are not all the same kind of transaction, and the form says which is which in a single letter.

Code G is a gift: the Chief Executive Officer transferred 1,250,000 Class B shares to a donor-advised fund on 17 August. Code J covers the Sequoia entities' pro rata in-kind distributions to their own limited partners for no consideration, 2,942,839 shares on each of 25 and 27 August. Code S is a sale: 1,840 shares at $27.14 by the Chief Accounting Officer on 21 August, under a Rule 10b5-1 plan adopted on 5 August 2025. Two Forms 144 were also filed, and a Form 144 is a notice of a proposed sale rather than a completed one.

The sale is small and it is not the point. The point is the reading order: code first, then plan adoption date, then count. A reader who takes the aggregate share count from a lock-up week and calls it selling risks getting the direction wrong, and does so more often than not.

One structural detail is worth carrying away. The 10-K states that Class B common stock carries 15 votes per share and Class A one, and the Form 4 footnote states that Class B converts to Class A automatically upon certain transfers, whether or not for value. A gift is a transfer. The 1,250,000 shares carried 18,750,000 votes as Class B and carry 1,250,000 as Class A, so the transfer moved 17,500,000 votes, computed at the ratios the certificate of incorporation sets. In a dual class company, a charitable transfer and a voting change are the same event, and only one of them appears in the headline.

9 · Ten things to take back to your own numbers

None of these need a large balance sheet. A company with $20 million of revenue and an option pool has every one of them, and usually has them without anyone having checked.

1. Put the stock compensation charge next to the operating result every quarter. If the charge is larger than the loss, the loss is a statement about equity issuance, not about whether customers cover costs. Those need different answers at a board meeting.
2. Know the cash cost of your non-cash charge. Net share settlement means the company remits employee tax in cash. That cash is real, it is usually in financing activities, and no statement puts it beside the add-back. Do it yourself, every period.
3. Decompose any expense line growing faster than revenue before you defend it. A 169% rise in overhead reads as indiscipline until the footnote shows 97.8% of it is equity. The footnote is the defence, and it takes one line to find.
4. Reconcile GAAP to non-GAAP out loud. When the adjustments are several times the adjusted profit, say so before an analyst does. The gap is the story either way; the only question is who frames it.
5. Watch revenue growth against operating cash flow. When they separate, the answer is in working capital, deferred revenue and accrued compensation. Find it before somebody asks.
6. Gross margin is where a new product line confesses. If the cost of serving revenue grows at more than twice the rate of revenue, the new line has different unit economics from the old one, whatever the growth rate says.
7. Check whether last year's profit was operating profit. Investment marks, currency and one-off gains can carry a bottom line. If the comparative was not operational, the swing you are explaining is not operational either.
8. On a Form 4, read the transaction code before the share count. G is a gift, J is an other-than-open-market transfer, S is a sale. Only S puts stock into the market from that person.
9. Check when the trading plan was adopted. A sale in a noisy week under a plan adopted a year earlier carries different information from a discretionary one, and the adoption date is on the form.
10. In a dual class structure, model every transfer as a voting event. If high-vote stock converts on transfer, then gifts and estate planning change control arithmetic. Run the voting consequence beside the economic one.

10 · Where it stands

At 30 June 2026 Figma held $445,845 thousand of cash and $1,221,293 thousand of marketable securities, about $1.67 billion together, against total liabilities of $873,367 thousand of which $626,783 thousand is deferred revenue. Total stockholders' equity was $1,477,907 thousand and the accumulated deficit $1,697,926 thousand. The company raised full year revenue guidance to between $1.463 billion and $1.467 billion and guided non-GAAP operating income of $125 million to $135 million. Net Dollar Retention was 136%, a company-defined measure computed on paid customers above $10,000 of annual recurring revenue.

For price context, and stated as data rather than as any view on value: the shares closed at $28.82 on 28 August 2026, down $1.80 or 5.88% on the day, on volume of 19,101,068 shares, against a 52 week range of $16.60 to $72.11. Market capitalisation was $15.36 billion on 533.01 million shares outstanding, as reported by stockanalysis.com at the 4:00 p.m. EDT close on 28 August 2026.

This is a company growing 47% with $1.67 billion of liquidity, decelerating from a high base on its own guidance, and paying its people at a scale that makes its own income statement hard to read. That last part is not a criticism and it is fully disclosed. It is simply the condition, and it is the condition of most companies that hire with equity. The difference is that at this size somebody eventually does the arithmetic.

FAQ

Is stock-based compensation really non-cash?
The charge is non-cash and is added back in operating activities. The settlement of the employee tax on it often is not. For the six months to 30 June 2026 Figma added back $316,552 thousand of stock-based compensation and separately paid $161,648 thousand of cash for taxes related to net share settlement of equity awards, reported within financing activities. That cash equals 51.1% of the add-back.

Why was Figma's operating loss $117 million when it reported non-GAAP operating income?
Stock-based compensation of $147,554 thousand in the quarter, against $7,310 thousand a year earlier. The charge is larger than the $117,289 thousand operating loss. Excluding it, the quarter shows operating income of $30,265 thousand, computed from the filed figures.

Why did Figma's general and administrative expense rise 169%?
General and administrative rose $65,793 thousand, from $38,922 thousand to $104,715 thousand. Stock-based compensation within that line rose $64,317 thousand, from $609 thousand to $64,926 thousand, which is 97.8% of the increase.

What did Figma report for the second quarter of 2026?
Revenue of $370,083 thousand for the three months ended 30 June 2026, up 48.2% from $249,640 thousand. GAAP gross profit was $309,611 thousand at an 83.66% margin. GAAP loss from operations was $117,289 thousand and the GAAP net loss $112,152 thousand, or $0.21 per share. Filed on Form 8-K on 5 August 2026.

Why did Figma's gross margin fall?
Cost of revenue grew 116.8%, from $27,889 thousand to $60,472 thousand, against revenue growth of 48.2%. Gross margin moved from 88.83% to 83.66%, a fall of 517 basis points. The company describes the quarter as its first full quarter of AI credit monetisation.

Did Figma insiders sell shares in August 2026?
The Forms 4 filed between 17 and 28 August report one open-market sale by an executive officer: 1,840 shares at $27.14 on 21 August by the Chief Accounting Officer, under a Rule 10b5-1 plan adopted on 5 August 2025. The other filings report a gift of 1,250,000 Class B shares by the Chief Executive Officer to a donor-advised fund under transaction code G, and pro rata in-kind distributions by Sequoia entities to their partners for no consideration under code J, of 2,942,839 shares on each of 25 and 27 August.

How much voting control does Figma's founder have?
The Form 10-K for 2025 states that Class B carries 15 votes per share, Class A one, and Class C none, and that as of 31 December 2025 Mr. Field held approximately 72.3% of the voting power of outstanding capital stock, including 24.4% subject to an irrevocable proxy from co-founder Evan Wallace.