Canva has spent years proving that it can do something many high-growth startups struggle to achieve: grow rapidly while making money. Then came generative AI.
The design-software company cut its expected revenue growth rate by a third to 20% after the unexpectedly high cost of delivering AI features prompted it to slow its rollout. Canva CEO and co-founder Melanie Perkins told Fortune users’ demand for new AI features “significantly exceeded” the company’s expectations,
“This validated the demand, but also showed us we needed to reduce the cost of completing an AI task to support a broad rollout,” Perkins said over email. “Rather than broadly rolling out a product before the underlying economics were ready, we decided to slow the rollout while we rebuilt the architecture, reduced unit costs and strengthened the business model.”
The cost problem lands at a pivotal moment for Canva because AI is central to its effort to become a broader workplace-software platform. Perkins previously told Fortune that the AI market was too fragmented, and Canva has since added tools including Canva Code as it seeks to expand beyond design into enterprise workflows.
This illustrates a broader dilemma spreading across the software industry: Companies can’t afford to sit out the AI boom, yet embracing it can undermine the lucrative economics of the businesses they are trying to protect.
“AI is making SaaS no longer a zero marginal cost solution, which has really been what I would call a lot of software’s secret sauce up until now,” Derek Hernandez, Pitchbook’s senior research analyst covering the intersection of SaaS and AI, told Fortune. “People want a much more capable product and solution, which through today’s technology means cost of usage is becoming a really global challenge for all of these companies.”
Perkins said in her email that Canva has reduced the cost per task by nearly 90% since launching Canva AI 2.0 in April, an agentic upgrade to the Canva platform, but with Canva AI users creating three times as many designs as in the previous version of Canva AI, the company is focusing on improving its economics. Figma, Canva’s public-market parallel, has disclosed its version of AI trade-offs: Its free-cash-flow margin fell to 14% in the second quarter from 27% in the first, forecasting third-quarter revenue growth at 36%, a deceleration from its June quarter 48%.
AI costs compress margins for SaaS
Hernandez told Fortune that Canva and Figma are the “biggest signals” that AI is breaking SaaS’s traditional model, as rising inference expenses—the recurring cost of processing AI requests—now show up as slower growth for Canva and margin compression for Figma.
“If you have a basic analogy of a car, everything it takes to build a Ford F150 would be training, and then gas, mechanic costs, and anything else would be inference, because that’s the point of using the product,” Hernandez explained. “Canva and Figma both hit the same wall about five days apart, but they cited it in different places.”
The AI cost reset carries particular weight as Canva evaluates a potential IPO. Fortune reported last year that an employee share sale valued Canva at $42 billion when experts said the company could go public in 2026, though now Hernandez told Fortune Canva might be targeting a time next year. By “making the decision to basically tap the brakes” on the AI rollout, Canva is thinking of investors.
“I’m sure they’re trying to protect their profitability, especially if they want to go to public investors,” Hernandez said.