Figma’s 46% Q1 Surge and California’s $450M Digital Software Tax
Figma reported Q1 revenue of $333.4 million, up 46% year-over-year, and raised full-year revenue guidance to $1.425 billion while gross margins held above 80% despite higher AI costs. California’s proposed digital software tax, effective January 1 2027, could generate $450 million for the state and $1.1 billion locally, pressuring cloud software vendors.
1. Figma Reports Strong Q1 Growth
Figma’s Q1 2026 revenue reached $333.4 million, a 46% increase year-over-year, driven by accelerating customer adoption. Net dollar retention climbed to 139%, customers spending over $100,000 annually grew 48%, and Pro team conversions jumped 150%, prompting management to raise full-year revenue guidance to $1.425 billion.
2. California Proposes Digital Software Tax
California plans a tax on digital prewritten software downloads effective January 1, 2027, expected to raise $450 million for the state and $1.1 billion in local revenues. The levy aims to equalize online and in-store purchases, potentially increasing costs for cloud-based vendors such as Atlassian.