Resideo Announces First Quarter 2026 Financial Results
- Net revenue of
$1.91 billion , up 8% year-over-year and above the high-end of outlook range; P&S up 9% and ADI up 8% - Total company gross margin of 28.8%; 12 consecutive quarters of year-over-year gross margin expansion achieved at P&S
- Net income of
$38 million , compared to net income of$6 million in first quarter of 2025; Adjusted EBITDA(1) of$215 million , up 28% year-over-year and above the high-end of outlook range - GAAP diluted EPS of
$0.17 ; Adjusted EPS(1) of$0.65 , up 3% year-over-year and above the high-end of outlook range
First Quarter 2026 Financial Highlights
- Net revenue of
$1,912 million , up 8% compared to$1,770 million in first quarter 2025, and above the high-end of outlook range - Total company gross margin of 28.8%, down 10 basis points year-over-year
- Net income of
$38 million , compared to net income of$6 million in first quarter 2025 - Adjusted EBITDA(1) of
$215 million , up 28% compared to$168 million in first quarter 2025, and above the high-end of outlook range - Diluted EPS of
$0.17 and Adjusted EPS(1) of$0.65 compared to diluted loss per share of$0.02 and Adjusted EPS(1) of$0.63 in the first quarter 2025; first quarter 2026 Adjusted EPS(1) was above the high-end of outlook range - Reported cash used by operating activities was
$145 million compared to cash used by operating activities of$65 million in first quarter 2025
Management Remarks
"Our first quarter results reflect the continued strong operational execution of both businesses in a dynamic macro-economic environment, resulting in results that exceeded the high end of our outlook range for all financial metrics," said
"I am very pleased with the focus, discipline, and leadership demonstrated by the P&S and ADI teams. The team's operational performance, along with the achievement of key business separation milestones, builds momentum and conviction for each company as we approach completion of the ADI spin-off later this year."
(1) | This press release includes certain "non-GAAP financial measures" as defined under the Securities Exchange Act of 1934. Resideo management believes the use of such non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted Cash Provided by Operations, assists investors in understanding the ongoing operating performance of Resideo by presenting the financial results between periods on a more comparable basis. See reconciliations of | ||||
Products and Solutions First Quarter 2026 Highlights
- Net revenue of
$706 million , up 9% compared to 2025 - Gross margin of 41.8%, up 40 basis points compared to 2025
- Income from operations of
$128 million , compared to$136 million in 2025 - Adjusted EBITDA(1) of
$177 million , or 25.1% of revenue, compared to$158 million , or 24.3% of revenue in 2025
P&S delivered net revenue of
Gross margin was 41.8%, compared to 41.4% in first quarter 2025 due primarily to the continued achievement of structural operating efficiencies. Research and development expenses increased
ADI Global Distribution First Quarter 2026 Highlights
- Net revenue of
$1,206 million , up 8% compared to 2025 - Gross margin of 21.2%, down 40 basis points compared to 2025
- Income from operations of
$34 million , compared to$34 million in 2025 - Adjusted EBITDA(1) of
$66 million , or 5.5% of revenue, compared to$72 million or 6.4% of revenue in 2025
ADI first quarter 2026 net revenue of
Gross margin was 21.2%, compared to 21.6% in first quarter 2025 due primarily to higher fuel costs for freight and unfavorable product sales mix. Research and development expenses increased
Cash Flow and Liquidity
Net cash used by operating activities was
Outlook
The Company re-affirms its full year 2026 outlook and initiates its outlook for the second quarter 2026.
($ in millions, except per share data) | Q2 2026 | 2026 |
Net revenue | ||
Non-GAAP Adjusted EBITDA(1) | ||
Non-GAAP Adjusted Earnings Per Share(1) |
Conference Call and Webcast Details
Resideo will hold a conference call with investors on
About Resideo
Resideo is a leading manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions for residential and commercial end-markets. We are a leader in the home heating, ventilation, and air conditioning controls markets, smoke and carbon monoxide detection home safety and fire suppression products markets, and security products markets. Our solutions and services can be found in over 150 million residential and commercial spaces globally, with tens of millions of new devices sold annually. For more information about Resideo and our trusted, well-established brands including First Alert, Honeywell Home, BRK, Control4, and others, visit www.resideo.com.
Contacts: | ||
Investors: | Media: | |
Global Head of Strategic Finance | Corporate Communications Manager | |
Forward-Looking Statements
This release and the related conference call contain "forward-looking statements." All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks and uncertainties, which may cause the actual results or performance of the Company to differ materially from such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) our ability to achieve our outlook regarding the second quarter 2026 and full year 2026, (2) our ability to recognize the expected savings from, and the timing and impact of, our existing and anticipated cost reduction actions, and our ability to optimize our portfolio and operational footprint, (3) the amount of our obligations and nature of our contractual restrictions pursuant to, and disputes that have or may hereafter arise under the agreements we entered into with Honeywell in connection with the spin-off of Resideo from Honeywell, (4) the ability of Resideo to drive increased customer value and financial returns and enhance strategic and operational capabilities, (5) risks and uncertainties relating to tariffs that have been or may be imposed by
Use of Non-GAAP Measures
This press release includes certain "non-GAAP financial measures" as defined under the Securities Exchange Act of 1934 and in accordance with Regulation G thereunder. Management believes the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting financial results between periods on a more comparable basis. Such non-GAAP financial measures should not be construed as an alternative to reported results determined in accordance with
We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with
Table 1: CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||
Three Months Ended | |||
(in millions, except per share data) | |||
Net revenue | $ 1,912 | $ 1,770 | |
Cost of goods sold | 1,361 | 1,259 | |
Gross profit | 551 | 511 | |
Operating expenses: | |||
Research and development expenses | 48 | 35 | |
Selling, general and administrative expenses | 340 | 306 | |
Intangible asset amortization | 31 | 30 | |
Restructuring expenses | 6 | 4 | |
Business separation costs | 24 | — | |
Total operating expenses | 449 | 375 | |
Income from operations | 102 | 136 | |
Indemnification Agreement expense (1) | — | 90 | |
Other expense (income), net | — | 6 | |
Interest expense, net | 47 | 25 | |
Net income before taxes | 55 | 15 | |
Provision for income taxes | 17 | 9 | |
Net income | 38 | 6 | |
Less: preferred stock dividends | 9 | 9 | |
Less: undistributed income allocated to preferred stockholders | 3 | — | |
Net income (loss) available to common stockholders | $ 26 | $ (3) | |
Earnings (loss) per common share: | |||
Basic | $ 0.17 | $ (0.02) | |
Diluted | $ 0.17 | $ (0.02) | |
Weighted average common shares outstanding: | |||
Basic | 151 | 148 | |
Diluted | 155 | 148 | |
(1) | Represents the expense incurred pursuant to the Indemnification Agreement, which, prior to its termination, had an annual cash payment cap of |
Three Months Ended | |||
(in millions) | |||
Accrual for Indemnification Agreement liabilities deemed probable and reasonably | $ — | $ 90 | |
Cash payments made to Honeywell prior to the third quarter of 2025 | — | (35) | |
Indemnification Agreement non-GAAP adjustment | $ — | $ 55 | |
Table 2: CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||
(in millions, except par value) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 438 | $ 661 | |
Accounts receivable, net | 1,114 | 1,073 | |
Inventories, net | 1,357 | 1,354 | |
Other current assets | 265 | 270 | |
Total current assets | 3,174 | 3,358 | |
Property, plant and equipment, net | 444 | 447 | |
Goodwill | 3,096 | 3,100 | |
Intangible assets, net | 1,069 | 1,091 | |
Other assets | 424 | 437 | |
Total assets | $ 8,207 | $ 8,433 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 1,015 | $ 1,131 | |
Accrued liabilities | 516 | 624 | |
Total current liabilities | 1,531 | 1,755 | |
Long-term debt | 3,165 | 3,167 | |
Other liabilities | 589 | 594 | |
Total liabilities | 5,285 | 5,516 | |
Stockholders' equity: | |||
Preferred stock, | 482 | 482 | |
Common stock, | — | — | |
Additional paid-in capital | 2,410 | 2,391 | |
Retained earnings | 374 | 345 | |
Accumulated other comprehensive loss | (168) | (157) | |
Treasury stock at cost | (176) | (144) | |
Total stockholders' equity | 2,922 | 2,917 | |
Total liabilities and stockholders' equity | $ 8,207 | $ 8,433 | |
Table 3: CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||
Three Months Ended | |||
(in millions) | |||
Cash Flows From Operating Activities: | |||
Net income | $ 38 | $ 6 | |
Adjustments to reconcile net income to net cash in operating activities: | |||
Depreciation and amortization | 51 | 47 | |
Restructuring expenses | 6 | 4 | |
Stock-based compensation expense | 14 | 15 | |
Other, net | — | 6 | |
Changes in assets and liabilities: | |||
Accounts receivable, net | (42) | (13) | |
Inventories, net | (6) | 17 | |
Other current assets | 6 | 9 | |
Accounts payable | (106) | (101) | |
Accrued liabilities | (114) | (112) | |
Non-current obligations payable under the Indemnification Agreement | — | 54 | |
Other, net | 8 | 3 | |
Net cash used in operating activities | (145) | (65) | |
Cash Flows From Investing Activities: | |||
Capital expenditures | (36) | (31) | |
Net cash used in investing activities | (36) | (31) | |
Cash Flows From Financing Activities: | |||
Repayments of long-term debt | (5) | — | |
Acquisition of treasury stock to cover stock award tax withholding | (32) | (15) | |
Preferred stock dividend payments | (9) | (9) | |
Other financing activities, net | 4 | 2 | |
Net cash used in financing activities | (42) | (22) | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 1 | 3 | |
Net decrease in cash, cash equivalents and restricted cash | (222) | (115) | |
Cash, cash equivalents and restricted cash at beginning of period | 662 | 693 | |
Cash, cash equivalents and restricted cash at end of period | $ 440 | $ 578 | |
Table 4: SUMMARY OF FINANCIAL RESULTS (UNAUDITED) | |||||||
Q1 2026 | |||||||
(in millions) | Products | ADI Global | Corporate | Total | |||
Net revenue | $ 706 | $ 1,206 | $ — | $ 1,912 | |||
Cost of goods sold | 411 | 950 | — | 1,361 | |||
Gross profit | 295 | 256 | — | 551 | |||
Research and development expenses | 36 | 12 | — | 48 | |||
Selling, general and administrative expenses | 119 | 186 | 35 | 340 | |||
Intangible asset amortization | 6 | 24 | 1 | 31 | |||
Restructuring expenses | 6 | — | — | 6 | |||
Business separation costs | — | — | 24 | 24 | |||
Income (loss) from operations | $ 128 | $ 34 | $ (60) | $ 102 | |||
Q1 2025 | |||||||
(in millions) | Products | ADI Global | Corporate | Total | |||
Net revenue | $ 649 | $ 1,121 | $ — | $ 1,770 | |||
Cost of goods sold | 380 | 879 | — | 1,259 | |||
Gross profit | 269 | 242 | — | 511 | |||
Research and development expenses | 27 | 8 | — | 35 | |||
Selling, general and administrative expenses | 101 | 173 | 32 | 306 | |||
Intangible asset amortization | 6 | 23 | 1 | 30 | |||
Restructuring expenses | (1) | 4 | 1 | 4 | |||
Income (loss) from operations | $ 136 | $ 34 | $ (34) | $ 136 | |||
Q1 2026 % change compared with prior period | |||||||
Products | ADI Global | Corporate | Total | ||||
Net revenue | 9 % | 8 % | N/A | 8 % | |||
Cost of goods sold | 8 % | 8 % | N/A | 8 % | |||
Gross profit | 10 % | 6 % | N/A | 8 % | |||
Research and development expenses | 33 % | 50 % | N/A | 37 % | |||
Selling, general and administrative expenses | 18 % | 8 % | 9 % | 11 % | |||
Intangible asset amortization | — % | 4 % | — % | 3 % | |||
Income (loss) from operations | (6) % | — % | 76 % | (25) % | |||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||
ADJUSTED DILUTED EARNINGS PER SHARE AND | |||
(Unaudited) | |||
RESIDEO TECHNOLOGIES, INC. | |||
Three Months Ended | |||
(in millions, except per share data) | |||
GAAP Net income | $ 38 | $ 6 | |
Less: preferred stock dividends | 9 | 9 | |
Less: undistributed income allocated to preferred stockholders | 3 | — | |
GAAP Net income (loss) available to common stockholders | 26 | (3) | |
Indemnification Agreement non-GAAP adjustment (1) | — | 55 | |
Intangible asset amortization | 31 | 30 | |
Business separation costs | 24 | — | |
Litigation settlement | 18 | — | |
Stock-based compensation expense | 14 | 15 | |
Restructuring expenses | 6 | 4 | |
Undistributed income allocated to preferred stockholders | 3 | — | |
Other (2) | 1 | 7 | |
Tax effect of applicable non-GAAP adjustments (3) | (22) | (14) | |
Non-GAAP Adjusted net income | $ 101 | $ 94 | |
Three Months Ended | |||
GAAP Net income (loss) available to common shareholders per diluted | $ 0.17 | $ (0.02) | |
Indemnification Agreement non-GAAP adjustment (1) | — | 0.37 | |
Intangible asset amortization | 0.20 | 0.20 | |
Business separation costs | 0.15 | — | |
Litigation settlement | 0.12 | — | |
Stock-based compensation expense | 0.09 | 0.10 | |
Restructuring expenses | 0.04 | 0.03 | |
Undistributed income allocated to preferred stockholders | 0.02 | — | |
Other (2) | — | 0.05 | |
Tax effect of applicable non-GAAP adjustments (3) | (0.14) | (0.10) | |
Non-GAAP Adjusted diluted earnings per share | $ 0.65 | $ 0.63 | |
(1) | Refer to the Unaudited Consolidated Statements of Operations herein. |
(2) | Other includes net periodic pension benefit costs, excluding service costs, foreign exchange transaction loss (income), acquisition and miscellaneous other non-recurring, non-operating income and losses. |
(3) | We calculate the tax effect of relevant non-GAAP adjustments by applying a flat statutory tax rate of 25% for all non-deductible and taxable adjustments. |
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||
ADJUSTED EBITDA AND NET INCOME COMPARISON | |||
(Unaudited) | |||
RESIDEO TECHNOLOGIES, INC. | |||
Three Months Ended | |||
(in millions) | |||
Net revenue | $ 1,912 | $ 1,770 | |
GAAP Net income | $ 38 | $ 6 | |
GAAP Net income as a % of net revenue | 2.0 % | 0.3 % | |
Provision for income taxes | 17 | 9 | |
GAAP Net income before taxes | 55 | 15 | |
Indemnification Agreement non-GAAP adjustment (1) | — | 55 | |
Depreciation and amortization | 51 | 47 | |
Interest expense, net | 47 | 25 | |
Business separation costs | 24 | — | |
Litigation settlement | 18 | — | |
Stock-based compensation expense | 14 | 15 | |
Restructuring expenses | 6 | 4 | |
Other (2) | — | 7 | |
Non-GAAP Adjusted EBITDA | $ 215 | $ 168 | |
Non-GAAP Adjusted EBITDA as a % of net revenue | 11.2 % | 9.5 % | |
(1) | Refer to the Unaudited Consolidated Statements of Operations herein. |
(2) | Other includes net periodic pension benefit costs, excluding service costs, foreign exchange transaction loss (income), acquisition and miscellaneous other non-recurring, non-operating income and losses. |
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||
(Unaudited) | |||
PRODUCTS AND SOLUTIONS SEGMENT | |||
Three Months Ended | |||
(in millions) | |||
Net revenue | $ 706 | $ 649 | |
GAAP Income from operations | $ 128 | $ 136 | |
GAAP Income from operations as a % of net revenue | 18.1 % | 21.0 % | |
Litigation settlement | 18 | — | |
Restructuring expenses | 6 | (1) | |
Stock-based compensation expense | 5 | 5 | |
Other (1) | $ (1) | $ (1) | |
Non-GAAP Adjusted Income from Operations | $ 156 | $ 140 | |
Depreciation and amortization | 21 | 18 | |
Non-GAAP Adjusted EBITDA | $ 177 | $ 158 | |
Non-GAAP Adjusted EBITDA as a % of net revenue | 25.1 % | 24.3 % | |
(1) | Other includes other miscellaneous adjustments. |
ADI GLOBAL DISTRIBUTION SEGMENT | |||
Three Months Ended | |||
(in millions) | |||
Net revenue | $ 1,206 | $ 1,121 | |
GAAP Income from operations | $ 34 | $ 34 | |
GAAP Income from operations as a % of net revenue | 2.8 % | 3.0 % | |
Stock-based compensation expense | 4 | 4 | |
Restructuring expense | — | 4 | |
Other (1) | (1) | 2 | |
Non-GAAP Adjusted Income from Operations | $ 37 | $ 44 | |
Depreciation and amortization | 29 | 28 | |
Non-GAAP Adjusted EBITDA | $ 66 | $ 72 | |
Non-GAAP Adjusted EBITDA as a % of net revenue | 5.5 % | 6.4 % | |
(1) | Other includes other miscellaneous adjustments and acquisition costs. |
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SOURCE Resideo Technologies, Inc.