Canva is grappling with the rising cost of building tools on top of frontier artificial intelligence models and those bills are starting to bite. The $US42 billion ($60 billion) private technology company told investors its second-quarter revenue reached $921.9 million, a 25.2% jump on a year earlier. That growth still fell short of its earlier revenue guidance and created an unusual downgrade for Australia’s most valuable technology business. Investors learned of the shortfall in a quarterly update sent on Monday and circulated to backers.
The company has built its position as Australia’s largest private company on design software used by millions of businesses, educators and students to create and manage visual projects. To offset falling valuations across listed software stocks, a trend many investors describe as a “SaaSPocalypse”, Canva has been aggressively recasting itself as an AI-first platform. The company is leaning heavily into generative tools and automation features instead of simply being a template-driven design suite. The strategic shift is intended to defend its user base and valuation as competition from AI-native rivals intensifies.
A wave of new AI-powered products, unveiled at Canva’s US customer conference in April, has turned out to be far more expensive to ship than management anticipated. Some of those features are now running as much as six months behind schedule, stretching development timelines and delaying potential revenue. The frontier models that power these tools typically charge usage-based fees so higher customer activity can quickly inflate costs. Those economics complicate Canva’s efforts to balance rapid AI rollouts with the profitability expectations attached to a $60 billion valuation.
