Figma Inc (NYSE:FIG) shares are taking a beating in extended trading Wednesday, even after the company delivered a beat-and-raise quarter. The collaborative design software maker reported second-quarter results that topped analyst expectations, but investors seem to be looking for something more.

Figma Q2 Highlights

Figma reported second-quarter revenue of $370.08 million, beating estimates of $351.56 million, per market data. The company reported adjusted earnings of eight cents per share, beating estimates of four cents per share.

Total revenue was up 48% year-over-year. Figma generated $60.9 million of net cash from operations and $53.2 million of free cash flow during the quarter.

"Q2 was Figma’s third straight quarter of accelerated revenue growth, and as code gets commoditized and value moves up the stack, the opportunity ahead of us has only grown," said Dylan Field, CEO of Figma.

Figma had 15,964 paid customers with more than $10,000 in ARR and 1,635 paid customers with more than $100,000 in ARR as of June 30.

Looking ahead, Figma expects third-quarter revenue to be in the range of $373 million to $375 million, versus estimates of $364.87 million. The company also raised its full-year revenue outlook from a range of $1.422 billion to $1.428 billion to a new range of $1.463 billion to $1.467 billion, versus estimates of $1.437 billion.

"Net Dollar Retention Rate remained strong at 136% as customers expanded both seats and AI credit add-ons. The strength of these signals gives us the confidence to raise our full year revenue outlook while continuing to invest behind the products we introduced at Config," said Praveer Melwani, CFO of Figma.

Figma executives will further discuss the quarter on an earnings call set for 5 p.m. ET.

FIG Shares Face Heavy Selling Pressure

Despite the positive results, Figma shares were down 16.52% in after-hours Wednesday, trading at $23.50 at the time of publication, according to market data.

It's a classic case of "good news, bad stock reaction," a pattern that's become all too familiar in the tech sector. Investors may be taking profits after a strong run, or they might be concerned about the company's valuation relative to its growth trajectory. Either way, the market's response underscores the volatility that can accompany even the most solid earnings reports.