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FIGS Inc (NYSE:FIGS) reported first-quarter 2025 results on May 8, showing revenue growth that exceeded expectations but declining profitability metrics and a negative outlook for the full year. The healthcare apparel company’s stock tumbled 14.26% in aftermarket trading to $4.33, erasing earlier gains, as investors reacted to the mixed results.
Quarterly Performance Highlights
FIGS delivered year-over-year net revenue growth of 5% in Q1 2025, reaching $124.9 million and exceeding the company’s own outlook. Active customers grew 4% to 2.7 million, while average order value (AOV) increased 3% to $119.
As shown in the following chart of quarterly revenue growth:
The company’s core scrubwear category grew 5%, while non-scrubwear products grew 4%. Geographic performance showed a stark contrast, with U.S. revenue growing just 3% compared to international growth of 16%.
Despite the revenue growth, FIGS’ profitability metrics declined across the board. Gross margin fell to 67.6% from 68.9% in Q1 2024, while adjusted EBITDA margin dropped significantly to 7.2% from 10.9% a year earlier.
The following slide illustrates the key Q1 metrics:
The company’s customer metrics show steady growth in active customers but flat net revenues per active customer:
Average order value has shown improvement, reaching $119 in Q1 2025:
Strategic Initiatives
FIGS continues to focus on international expansion as a key growth driver. The company currently operates in 32 international markets, with planned debuts in Japan (Q2 2025) and South Korea (second half of 2025). Management highlighted that over 80% of global healthcare professionals are outside the U.S., representing a significant long-term opportunity.
Product innovation remains central to FIGS’ strategy. Recent launches include FORMX™, described as "a revolutionary new fabric that delivers unparalleled flexibility with a premium touch," and a new FIGS | New Balance 3447 Zip shoe designed specifically for healthcare professionals.
The company is also expanding its retail presence with what it calls "Community Hubs." FIGS plans to open three new locations in the second half of 2025, citing research that over 60% of non-FIGS customers want to try and feel products before purchasing.
Additionally, FIGS is developing its TEAMS program targeting healthcare institutions, which historically represent about 15% of the U.S. scrubs market. The company hired a dedicated leader for this initiative in January 2025 and is forming an outbound sales function.
Financial Position
FIGS maintained a strong cash position with $251.2 million in cash, cash equivalents, and short-term investments at the end of Q1 2025. The company generated $7.9 million in free cash flow during the quarter.
The following slide shows the company’s cash position over time:
Forward-Looking Statements
Despite the positive Q1 revenue growth, FIGS provided a concerning outlook for the full year 2025, projecting a low single-digit decline in net revenues compared to 2024. The company expects adjusted EBITDA margin to be between 7.5% and 8.5%.
The following slide details the company’s full-year outlook:
Market Reaction & Analysis
The 14.26% drop in FIGS’ stock price during aftermarket trading suggests investors are concerned about the company’s declining profitability metrics and negative revenue outlook for the full year. This reaction comes despite FIGS beating revenue expectations for Q1.
The contrast between the company’s Q1 performance and full-year outlook indicates potential challenges ahead. While international expansion continues to show strong growth at 16%, the much larger U.S. market is growing at just 3%, which may not be sufficient to offset the profitability pressures the company is facing.
FIGS’ stock has traded between a 52-week high of $7.055 and a low of $3.565, according to available data. The current aftermarket price of $4.33 puts the stock closer to its yearly low, reflecting investor uncertainty about the company’s near-term prospects despite its long-term growth initiatives.
The healthcare apparel company continues to emphasize its differentiated position in a large, replenishment-driven market with approximately 23 million workers in the U.S. alone. However, the declining margins and negative revenue outlook suggest FIGS is facing headwinds that may challenge its growth trajectory in the coming quarters.
Full presentation:
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