Adobe announced Thursday morning that it will acquire design software firm Figma in a deal worth about $20 billion in cash and stock.
Figma, founded in 2012, creates cloud-based design software that allows teams to collaborate in real time. It competes head-to-head with Adobe’s XD program.
Figma, whose backers include the likes of Index Ventures, Greylock Partners and Kleiner Perkins, is expected to generate over $400 million in annual recurring revenue this year, sources familiar with the company’s financials previously told CNBC. Adobe confirmed Figma’s ARR will surpass $400 million exiting 2022.
Adobe said it will integrate some of the features from its other products, such as illustration, photography and video technology, into Figma’s platform. Adobe sells a range of software services for photo and video professionals, like Photoshop, Illustrator, Premiere Pro and more.
“Adobe’s greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions,” said Shantanu Narayen, chairman and CEO, Adobe. “The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity.”
Once the deal closes, Figma founder and CEO Dylan Field will continue to run the company. He’ll report to David Wadhwani, president of Adobe’s digital media business.
Adobe also announced fiscal third quarter results. It reported earnings of $3.50 per share, adjusted, topping Refinitiv estimates of $3.33 per share. It posted $4.52 billion in revenue, which beat analyst expectations of $4.43 billion.
The company issued mixed guidance for the fiscal fourth quarter. Adobe said revenue in its fiscal fourth quarter will be $4.52 billion, compared to consensus estimates of $4.6 billion, according to StreetAccount. It expects to report earnings of $3.50 per share, adjusted, above a StreetAccount forecast of $3.47 per share.
Shares of Adobe slid more than 10% in premarket trading.
