On August 19, 2025, the financial markets were abuzz with news from two technology companies that, while in different sectors, are both navigating the stormy waters of growth and profitability. Resideo Technologies and Figma each released updates that shed light on the challenges and opportunities facing modern tech firms: robust revenue growth on the one hand, and persistent questions about long-term earnings on the other.
Resideo Technologies, a major player in comfort, energy management, and safety solutions, reported its second quarter 2025 results earlier this month. According to Simply Wall St, the company posted net sales of US$1.94 billion for the quarter—a figure that would make most executives beam. Yet, the headline number came with a sobering footnote: a net loss of US$825 million for the quarter. It’s a stark contrast, and one that has investors scratching their heads. How can a company with such strong sales numbers still find itself so deep in the red?
Despite the loss, Resideo’s management struck an optimistic tone. The company raised its full-year revenue guidance, now expecting between US$7.45 billion and US$7.55 billion for 2025. This move signals confidence in continued sales momentum, even as operational challenges persist. As Simply Wall St pointed out, "this combination of higher sales alongside a significant net loss, coupled with an improved outlook for annual revenue, points to both operational challenges and management’s confidence in sustained top-line momentum."
Digging deeper, Resideo’s long-term narrative hinges on its ability to convert revenue growth into sustainable profitability. The company’s projections are ambitious: by 2028, it expects to reach US$8.0 billion in revenue and US$641.6 million in earnings. Achieving this would require a steady 2.6% annual revenue growth and a dramatic turnaround—specifically, a US$1,457.6 million improvement from its current net loss of US$816.0 million. That’s a tall order, especially given ongoing competitive pressures and the risk that legacy product lines could lag in innovation.
For investors, the raised guidance is a double-edged sword. On one hand, it suggests that demand for Resideo’s offerings remains strong. On the other, the scale of the loss highlights just how challenging it can be to turn top-line growth into bottom-line success. The company’s fair value is hotly debated among analysts, with estimates ranging from US$16.02 to US$45.15 per share. Much of this debate centers on whether new product launches—and the broader transformation in smart home technology—can drive the kind of profitability that management envisions.
Simply Wall St’s community narratives reflect this uncertainty: "These diverse outlooks reflect differing views on the company’s ability to convert sales growth into future profitability and resilience, highlighting that your assessment of potential will depend on the priorities you bring to the table." Investors are thus left to weigh the risks of further earnings volatility against the promise of new product adoption and a possible turnaround.
Meanwhile, in the world of design software, Figma has been making headlines for its own impressive growth story—albeit with a similar profitability conundrum. Figma, which went public in July 2025, offers a suite of collaborative design and website creation tools that have quickly gained traction, especially as a low-cost alternative to Adobe’s pricier offerings. According to The Motley Fool, Figma’s professional plans cost just $16 per month, compared to $23 for Adobe Photoshop alone, or as much as $70 for the full Creative Cloud suite. It’s no wonder that cost-conscious consumers are giving Figma a closer look.
The numbers back up Figma’s popularity. In 2024, the company’s revenue soared to $749 million, marking a 48% year-over-year increase. The momentum continued into 2025, with first-quarter sales hitting $228 million—a 46% jump over the prior year. Even more impressive, Figma boasts a net dollar retention rate of 132%, indicating that existing customers are spending more year after year. And with 95% of Fortune 500 companies counted among its users, Figma’s reach is undeniable. Notably, two-thirds of these users are non-designers, a testament to the platform’s accessibility and ease of use.
But here’s the rub: Figma’s meteoric rise hasn’t translated into significant profits. The company has reported operating losses in each of the past two years. In the first three months of 2025, Figma managed to eke out earnings per share (EPS) of just $0.04, which would annualize to $0.16. With shares trading around $80, that puts Figma at a sky-high price-to-earnings ratio of nearly 500. Even on a price-to-revenue basis, the stock is trading at a multiple of about 50—expensive by almost any measure.
The Motley Fool’s analysis lays out the challenge: "While the company has high gross margins, its operating expenses are also high. In the most recent quarter, they accounted for approximately three-quarters of Figma’s top line. Without lower overhead and operating costs, it’s going to be difficult for the company to generate much earnings growth." In other words, Figma’s growth story is impressive, but unless it can rein in expenses, profitability will remain elusive.
There’s also the looming specter of competition, particularly as artificial intelligence continues to enhance design tools across the industry. As The Motley Fool notes, "artificial intelligence is enhancing many design tools and, thus, can give users many more alternatives. Such alternatives may even be more advanced than Figma’s." For investors, this means that Figma’s current growth rates may be hard to sustain—and the lofty valuation could come under pressure if the company can’t keep up.
Both Resideo Technologies and Figma are emblematic of a broader trend in the tech sector: companies that are growing rapidly, capturing market share, and building impressive user bases, but still struggling to convert that momentum into durable profits. For Resideo, the challenge is overcoming operational headwinds and transforming sales growth into black ink on the balance sheet. For Figma, it’s about justifying a premium valuation in a crowded, fast-evolving market where today’s disruptor can quickly become tomorrow’s also-ran.
Investors and analysts alike are left to puzzle over a familiar question: Is it better to bet on growth, even if profits are years away, or to demand evidence of sustainable earnings before jumping in? As these companies chart their paths forward, the answer will likely depend on their ability to adapt, innovate, and—crucially—deliver on the promise of profitability.
In the end, both Resideo and Figma offer compelling stories for those willing to look past near-term volatility. But as the latest results make clear, the road from rapid growth to lasting profit is rarely a straight line—and never guaranteed.
