In her Q2 CY2026 update to shareholders, Perkins said the “average cost of serving an AI task was too high” – an issue companies such as Atlassian, which recently capped employee spending on AI, are dealing with as they also try to reposition as AI-first amid “SAASpocalypse” concerns, and falling share prices and valuations for software companies.
But going hard at the cutting edge of AI came at a cost, and the design platform was “relying too heavily on frontier models,” Perkins explained.
“Several of our first-party models were not yet ready for release, and our pricing, consumption model and usage controls had not caught up with the outsized demand we were seeing,” she wrote.
Canva, valued at US$42 billion (A$60bn), and pondering a Nasdaq listing, has developed in-house AI as it pushed AI products to the forefront with the launch of Canva AI 2.0 four months ago – with 2.1 now on the way.
The good news is that revenue remains strong, growing by 25.2% on 12 months ago to hit US$921.9m (A$1.32bn) in the June quarter.
“While this is strong growth at our scale, we want to acknowledge it is below the ambitious goal we set at the beginning of the year,” Perkins wrote to investors, explaining that productroll out was slowed to get the underlying economics right.
“We decided to slow the rollout while we rebuilt the architecture, reduced unit costs and strengthened the business model,” she wrote.
“This slowed our distribution and impacted our near-term growth, but it also enabled some of the most important technical advances in Canva’s history and put us in a much stronger position to scale AI sustainably.”
Cofounder and COO Cliff Obrecht outlined at Blackbird’s Sunrise in April how the company was investing in its own models to cut its AI bill, especially for “freemium” users, while still routing jobs to frontier models depending on the task. Leonardo.AI, the Sydney generative AI startup Canva acquired in 2024, has also played a key role in developing an alternative platform.
The strategy is paying off with a 90% reduction in the cost of serving an AI task. The product is still Whole Foods Market luxe, but at Aldi pricing, with Canva’s video model 17x cheaper than a frontier model and its image model an astonishing 30x cheaper.
Canva has now been profitable for nine years and ended the June quarter sitting on US$1.47bn in cash – money the acquisitive Obrecht may put to use as part of building out the company’s product capabilities.
