Figma (FIG) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01We have experienced rapid growth which may not be indicative of our future growth, and if we do not effectively manage our future growth, our business, operating results, financial condition, and future prospects may be adversely affected. Our rapid growth also makes it difficult to evaluate future prospects
2. 02Our operating results may fluctuate significantly, which could make our future results difficult to predict and could cause our operating results to fall below expectations
3. 03We have a limited operating history at our current scale, which makes it difficult to evaluate our current business and future prospects and increases the risks associated with your investment
4. 04Changes in our pricing, packaging, or billing models could adversely affect our business, operating results, financial condition, and future prospects
5. 05number of seats that customers or potential customers subscribe to, which could lead to a loss of revenue, slower growth, and adversely impact our business, operating results, and financial condition. In response to any industry changes resulting from AI, we may need to make further changes to our billing models
6. 06Over time, we expect to introduce products, features, and services, or otherwise implement pricing and packaging models, that are billed differently than on a per-seat subscription basis, which could adversely affect our business, operating results, financial condition, and future prospects
7. 07If we are unable to attract new customers or retain and increase adoption of our products and services by existing customers, we may not achieve the growth we expect, which would adversely affect our business, operating results, financial condition, and future prospects
8. 08If we are not able to effectively introduce enhancements to our platform, including new offerings, features, and functionality, that achieve widespread market adoption, or keep pace with technological developments, our business, operating results, and financial condition could be adversely affected
9. 09Competitive developments in AI and our inability to effectively respond to such developments could adversely affect our business, operating results, and financial condition
10. 10If these changes reduce demand for our platform or disrupt our monetization model, this could adversely affect our business, operating results, and financial condition
11. 11We face intense competition and could lose market share to our competitors, which would adversely affect our business, operating results, financial condition, and future prospects
12. 12Our product and investment decisions may negatively impact our short-term financial results and may not produce the long-term benefits that we expect
13. 13The markets for our products and services are relatively new and unproven and may not grow, which would adversely affect our business, operating results, financial condition, and future prospects
14. 14Our use of AI in our products and services may result in reputational harm, legal liability, competitive risks, and regulatory concerns that could adversely affect our business, operating results, and financial condition
15. 15to our products or business practices. Any such changes could be costly, technically complex, and disruptive to our product roadmap and operations, could reduce the performance or usefulness of our AI features, and could adversely affect customer relationships, revenue, and growth
16. 16Moreover, any changes to the above discussed existing legal regimes with respect to data privacy and AI technologies within the United States and abroad could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive
17. 17companies we acquire could have vulnerabilities and/or unsophisticated security measures, which may expose us to significant cybersecurity, operational, and financial risks
18. 18Our failure to address these risks or other problems encountered in connection with acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally
19. 19Adverse global macroeconomic conditions or reduced software spending could adversely affect our business, operating results, and financial condition
20. 20Security and privacy breaches may adversely impact our business, operating results, and financial condition
21. 21If we do not or cannot maintain the compatibility of our platform with our customers’ existing technology, including third-party technologies that our customers use in their businesses, our business, operating results, and financial condition may be adversely affected
22. 22If our platform fails to perform properly, whether due to material defects with the software or external issues, our reputation could be adversely affected, our market share could decline, and we could be subject to claims for refunds, credits, damages, indemnity, or other forms of liability, including lawsuits
23. 23The costs incurred in correcting any material defects, software “bugs,” or errors in our platform might be substantial and could adversely affect our operating results
24. 24If we are not able to maintain and enhance our brand and reputation, our business, operating results, and financial condition may be adversely affected
25. 25We host our platform on Amazon Web Services. Any disruption in the operations of Amazon Web Services, limitations on capacity, or interference with our use could adversely affect our business, operating results, and financial condition
26. 26We rely on third-party service providers for critical components of our operations, and disruptions or changes in those services could adversely affect our business
27. 27Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all
28. 28Our business involves hosting user-generated and third-party content, which may present certain legal and reputational risks
29. 29Our ability to maintain customer satisfaction depends in part on the quality of our customer support. Failure to maintain high-quality customer support could have an adverse effect on our business, operating results, financial condition, and future prospects
30. 30Because we primarily recognize subscription revenue over the subscription term, downturns or upturns in new sales and renewals are not immediately reflected in full in our operating results
31. 31We make our platform available to users free of charge on our Starter plan. If this fails to lead to customers purchasing paid subscriptions, our business, operating results, and financial condition may be adversely affected
32. 32Our sales cycles can be long and unpredictable, and our sales and post-sales efforts require considerable time and expense
33. 33Sales to government entities are subject to a number of challenges and risks

Risks Related to Our People

1. 34If we do not effectively integrate, train, manage, and retain product, design, engineering, and sales personnel, and expand our product, design, engineering, and sales capabilities, we may be unable to increase our customer base and increase sales to our existing customers
2. 35We believe that our company culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity, and teamwork fostered by our culture, and our business may be harmed

Risks Related to Our Intellectual Property

1. 36Failure to obtain, maintain, protect, or enforce our intellectual property and proprietary rights could enable others to copy or use aspects of our platform without compensating us, which could harm our brand, business, and operating results
2. 37Some of our technology incorporates “open source” software, which could under certain circumstances materially and adversely affect our ability to sell our platform and subject us to possible litigation
3. 38We license technology from third parties for the development of our products, and our inability to maintain those licenses could harm our business

Risks Related to Legal and Regulatory Matters

1. 39Our business is subject to complex and evolving U.S. and foreign laws, regulations, and industry standards, many of which are subject to change and uncertain interpretations, which uncertainty could harm our business, operating results, and financial condition
2. 40frameworks and principles for compliance, our reputation, business, operating results, and financial condition may be adversely affected
3. 41We are subject to governmental economic sanctions requirements and export and import controls that could impair our ability to compete in international markets or subject us to liability if we are not in compliance with applicable laws
4. 42We are subject to anti-bribery, anti-corruption, and similar laws and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation
5. 43We are subject to European digital services and content moderation regulations, which impose evolving compliance requirements that may impact how we offer our products in Europe
6. 44We may become involved in litigation that may adversely affect us

Risks Related to Financial and Accounting Matters

1. 45If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired
2. 46We incur significant costs and management resources as a result of operating as a public company
3. 47If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our operating results could be adversely affected
4. 48Our Revolving Credit Facility contains restrictive and financial covenants that may limit our operational flexibility. If we fail to meet our obligations under the credit facility, our operations may be interrupted and our business, operating results, and financial condition could be adversely affected
5. 49We may require additional capital to fund our business and support our growth, and any inability to generate or obtain such capital may adversely affect our business, operating results, and financial condition
6. 50We are exposed to fluctuations in currency exchange rates, which may be exacerbated in the future and could negatively affect our business, operating results, and financial condition
7. 51We could be subject to additional tax liabilities and U.S. federal and global income tax reform could adversely affect us
8. 52Our ability to use our deferred tax assets may be subject to certain limitations under U.S. or foreign law

Risks Related to Ownership of Our Class A Common Stock

1. 53The market price of our Class A common stock may be volatile, and you could lose all or part of your investment
2. 54Our Class B common stock has 15 votes per share, and our Class A common stock has one vote per share. Our Class C common stock has no voting rights, except as required by law
3. 55The multi-class structure of our common stock may adversely affect the trading market for our Class A common stock
4. 56Sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our directors, executive officers, and principal stockholders, or the perception that these sales might occur, could cause the market price of our Class A common stock to decline
5. 57Certain holders of our Class A common stock have rights, subject to some conditions, to require us to file registration statements for the public resale of the Class A common stock or to include such shares in registration statements that we may file for us or other stockholders
6. 58If financial analysts issue inaccurate or unfavorable research regarding our Class A common stock, our stock price and trading volume could decline
7. 59Any future issuance of our Class C common stock may have the effect of further concentrating voting control in our Class B common stock, may discourage potential acquisitions of our business, and could have an adverse effect on the market price of our Class A common stock
8. 60We do not intend to pay dividends in the foreseeable future. As a result, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A common stock
9. 61We are an “emerging growth company” and the reduced reporting requirements applicable to emerging growth companies could make our Class A common stock less attractive to investors
10. 62in our periodic reports and proxy statements, and (iii) exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved
11. 63Provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may limit attempts by our stockholders to replace or remove our current management
12. 64Our restated bylaws contain exclusive forum provisions for certain claims, which may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees
13. 65Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder