RESIDEO TECHNOLOGIES, INC.
For the period ended Apr 4, 2026. Filed May 12, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 4, 2026 · Filed May 12, 2026
REZI$19.40-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-27; filed 2025-11-05.
0001740332-25-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-04-04; filed 2026-05-12.
0001740332-26-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 120 current paragraphs.
64 unchanged; 31 reworded; 24 added; 39 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
•our ability to borrow funds and access capital markets in light of the terms of our debt documents or otherwise;
Current report
•provisions in our governing documents discouraging takeovers;
Current report
•our ability to recruit and retain qualified personnel;
Current report
Our ADI Global Distribution segment is a leading, global specialty distributor of professionally installed low-voltage products, including security and AV solutions, serving commercial and residential markets through an omnichannel go-to-market platform. ADI Global Distribution sells primarily to licensed professional installers, dealers, and integrators. We offer an expansive list of products from leading suppliers across key specialty low-voltage categories. ADI complements our third-party supplier products with a suite of exclusive brands and services offerings. On July 30, 2025, we announced our intention to separate the ADI Global Distribution segment through a tax-free spin-off to our shareholders. The ADI Spin-Off is expected to be completed in the second half of 2026, subject to certain conditions.
Current report
N/A = Not applicable or not meaningful
Current report
Net revenue for the three months ended April 4, 2026 was $1,912 million, an increase of $142 million, or 8.0%, compared to the same period in 2025, primarily due to incremental sales days in the year-over-year reporting period, and includes $90 million of revenue from favorable price and mix shift, favorable foreign currency exchange rates of $30 million, and higher sales volume of $27 million.
Current report
Selling, general and administrative expenses for the three months ended April 4, 2026 were $340 million, an increase of $34 million, or 11.1%, compared to the same period in 2025. The increase was primarily driven by certain legal settlements of $19 million and an increase in operating costs including people costs, rent, and third-party spend primarily due to the incremental days in the year-over-year reporting period.
Current report
Restructuring Expenses
Current report
Restructuring expenses for the three months ended April 4, 2026 were $6 million, an increase of $2 million, compared to the same period in 2025. The increase was primarily driven by employee termination costs related to our ongoing transformation initiatives, including changes to our global manufacturing footprint and workforce alignment.
Current report
Business Separation Costs
Current report
Business separation costs for the three months ended April 4, 2026 were $24 million. These expenditures are one‑time in nature and included third‑party advisory, consulting, legal, and other incremental separation‑related costs incurred in connection with the announced future ADI Spin-Off.
Current report
Other Expense (Income), Net
Current report
Other expense, net for the three months ended April 4, 2026 were immaterial, a decrease of $6 million, compared to the same period in 2025. The decrease was primarily attributable to favorable impacts from foreign currency exchange rates of $4 million, and final settlement related to the previous sale of the Resideo Grid Services business resulting in $1 million of incremental gain.
Current report
Interest expense, net for the three months ended April 4, 2026 was $47 million, an increase of $22 million, or 88.0%, compared to the same period in 2025. The increase was driven by an approximately $1.2 billion increase in outstanding debt related to the settlement of the Indemnification Agreement, resulting in $23 million of higher interest expense.
Current report
Tax Expense
Current report
Income tax expense for the three months ended April 4, 2026 was $17 million, an increase of $8 million or 89%, compared to the same period in 2025. The increase was primarily driven by an increase in income before taxes for the quarter, partially offset by a decrease in the effective tax rate.
Current report
Products and Solutions income from operations for the three months ended April 4, 2026 was $128 million, a decrease of $8 million, or 5.9%, compared to the same period in 2025. The decrease is primarily driven by approximately $18 million of certain one-time legal settlements, higher restructuring costs of $7 million, and lower sales volumes of $6 million. The decrease was partially offset by $22 million from favorable price and mix shift.
Current report
ADI Global Distribution net revenue for the three months ended April 4, 2026, was $1,206 million, an increase of $85 million, or 7.6%, compared to the same period in 2025. The increase was primarily driven by $43 million from favorable price and mix shift, higher sales volumes of $32 million, and favorable foreign currency exchange rates of $15 million.
Current report
ADI Global Distribution income from operations remained consistent at $34 million for the three months ended April 4, 2026 and March 29, 2025. The favorable impacts from price and mix shift of $9 million, increase in sales volumes of $7 million, and lower restructuring costs of $4 million, were offset by an increase in selling, general and administrative expenses of $13 million primarily due to the incremental days in the year-over-year reporting period, higher freight and duty costs of $4 million, and higher research and development costs of $4 million.
Current report
Corporate costs for the three months ended April 4, 2026 were $60 million, an increase of $26 million, or 76.5%, compared to the same period in 2025. The increase was primarily driven by business separation costs of $24 million incurred in connection with the announced future ADI Spin-Off and included third‑party advisory, consulting, legal, and other incremental separation‑related costs.
Current report
Liquidity and Capital Resources
Current report
Net cash used for operating activities for the three months ended April 4, 2026 was $145 million, compared to a $65 million use of cash for operations in the same period in 2025. The $80 million increase in the use of cash in the current period was primarily driven by $29 million higher use of cash in accounts receivable associated with the higher sales, $23 million higher use of cash associated with inventory build, $15 million cash payments for business separation activities in the current period, and a $54 million prior year source of cash associated with expenses incurred under the Indemnification Agreement, partially offset by a $32 million increase in current period net income.
Current report
Net cash used for investing activities for the three months ended April 4, 2026 was $36 million, compared to a $31 million use of cash for investing activities in the same period in 2025. The greater use of cash in the current period was due to a $5 million increase in capital expenditures in 2026 to enhance our operations.
Current report
Net cash used for financing activities for the three months ended April 4, 2026 was $42 million, compared to a $22 million use of cash for financing activities in the same period in 2025. The greater use of cash in the current period was driven primarily by a $17 million increase in cash used to acquire treasury stock in connection with stock award withholdings and a $5 million increase in long-term debt repayments in 2026.
Removed paragraphs (39)
Previous report
Our ADI Global Distribution segment is the leading global wholesale distributor of low-voltage products, including security and audio-visual solutions. With a portfolio of over 500,000 professionally installed products, ADI Global Distribution serves both the commercial and residential markets across key specialty categories including security, fire, audio-visual, access control, smart living, and data communications. This extensive offering is complemented by an expanding suite of proprietary technologies and services, under key exclusive brands such as Araknis Networks, Control4, OvrC, and WattBox.
Previous report
Net revenue for the three months ended September 27, 2025 was $1,864 million, an increase of $36 million, or 2.0%, from the same period in 2024, primarily due to $50 million of revenue from favorable price and mix, and $13 million from favorable foreign currency exchange rates. The increase was partially offset by a $28 million decrease from lower sales volume.
Previous report
Net revenue for the nine months ended September 27, 2025 was $5,577 million, an increase of $674 million, or 13.7%, from the same period in 2024, primarily due to $446 million of revenue from the acquisition of Snap One, $134 million from favorable price and mix, $86 million from higher sales volume, and $11 million from favorable foreign currency exchange rates.
Previous report
Gross profit for the nine months ended September 27, 2025 was $1,636 million, an increase of $265 million, or 19.3%, as compared to the same period in 2024, as shown in the above waterfall.
Previous report
Gross margin rate for the nine months ended September 27, 2025 was 29.3%, an increase of 130 bps as compared to the same period in 2024. The increase was primarily driven by favorable price and mix shift of 100 bps, and favorable impacts from the acquisition of Snap One of 70 bps. The increase was partially offset by lower margins on sales volumes of 30 bps.
Previous report
Research and development expenses for the nine months ended September 27, 2025 were $120 million, an increase of $51 million, or 73.9%, as compared to the same period in 2024. The increase was primarily driven by investments in both segments related to incremental headcount and third party services to develop and introduce new products into the market.
Previous report
Selling, general and administrative expenses for the three months ended September 27, 2025 were $324 million, an increase of $7 million, or 2.2%, as compared to the same period in 2024. The increase was primarily driven by $6 million of incremental operating costs including payroll and benefits, rent and third party spend, and $4 million of expenses related to the announced future ADI Spin-Off. The increase was partially offset by a net reduction in bad debt expense of $5 million primarily driven by the Product and Solutions segment.
Previous report
Selling, general and administrative expenses for the nine months ended September 27, 2025 were $949 million, an increase of $121 million, or 14.6%, as compared to the same period in 2024. The increase was primarily driven by $82 million of higher costs versus prior year associated with the acquisition and integration of Snap One, $33 million of incremental operating costs including payroll and benefits, rent, marketing, IT, third party spend, and travel expense, and $4 million related to expenses incurred in connection with the announced future ADI Spin-Off.
Previous report
Intangible asset amortization for the nine months ended September 27, 2025 was $91 million, an increase of $40 million, or 78.4% as compared with the same period in 2024. The increase was primarily due to additional amortization expense of $36 million associated with the new intangibles from the Snap One acquisition as well as foreign currency impacts.
Previous report
Restructuring, Impairment and Extinguishment Costs
Previous report
Restructuring, impairment and extinguishment costs for the three months ended September 27, 2025 were $3 million, a decrease of $26 million, or 89.7%, as compared to the same period in 2024. The decrease was primarily due to $28 million of restructuring costs incurred in the prior year for various restructuring actions, including capturing synergies from the Snap One acquisition, and pertains to employee termination costs. The decrease was partially offset by $3 million of debt extinguishment and modification costs incurred during the three months ended September 27, 2025.
Previous report
Restructuring, impairment and extinguishment costs for the nine months ended September 27, 2025 were $9 million, a decrease of $38 million, or 80.9%, as compared to the same period in 2024. The decrease was primarily due to $35 million of restructuring costs incurred in the prior year for various restructuring actions, including capturing synergies from the Snap One acquisition. In addition, we incurred $6 million of debt extinguishment costs as part of the Snap One acquisition, and $5 million in impairment expense related to an equity security in the prior year. The decrease was partially offset by $6 million in restructuring expenses related to the Products and Solutions and ADI Segments, and $3 million of debt extinguishment and modification costs related to Corporate incurred during the nine months ended September 27, 2025.
Previous report
Indemnification Agreement expense for the nine months ended September 27, 2025 was $972 million, an increase of $837 million from the $135 million recorded in the same period of 2024. The increase was driven by the additional expense incurred in connection with the termination of the Indemnification Agreement with Honeywell.
Previous report
Other Expenses, Net
Previous report
Other expenses, net for the three months ended September 27, 2025 were $7 million, a decrease of $3 million as compared to the same period in 2024. The decrease was primarily driven by a $3 million loss on the sale of certain assets and related liabilities in the Products and Solutions segment in the prior year.
Previous report
Other expenses, net for the nine months ended September 27, 2025 were $22 million, an increase of $12 million as compared to the same period in 2024. The increase was primarily driven by $15 million in unfavorable foreign currency exchange rates, and a $4 million gain from the sale of an investment in the prior year. The increase was partially offset by a $8 million loss on sale of certain assets and related liabilities in the Products and Solutions segment in the prior year.
Previous report
Interest expense, net for the three months ended September 27, 2025 was $37 million, an increase of $10 million, or 37.0%, as compared to the same period in 2024. The increase was due to additional long-term debt resulting in $7 million of higher interest expense, and a decrease of $4 million in interest rate derivative related receipts due to interest rate fluctuations and a lower aggregate notional amount of interest rate swaps due to maturities.
Previous report
Interest expense, net for the nine months ended September 27, 2025 was $86 million, an increase of $31 million, or 56.4%, as compared to the same period in 2024. The increase was due to additional long-term debt resulting in $15 million of higher interest expense, a decrease of $12 million in interest rate derivative related receipts due to interest rate fluctuations and a lower aggregate notional amount of interest rate swaps due to maturities, and lower interest income of $3 million as a result of lower interest rates and lower cash balances.
Previous report
Tax (Benefit) Expense
Previous report
Income tax expense for the nine months ended September 27, 2025 was $50 million, a decrease of $33 million as compared to the same period in 2024. The decrease was primarily driven by a decrease in income before taxes and an increase in the non-deductible Indemnification Agreement expense. The effective income tax rate decreased from 47.2% to (8.2)%, primarily driven by the mix of earnings across the jurisdictions in which we operate, decreased income before taxes with relatively fixed non-deductible expenses and a large increase in the non-deductible Indemnification Agreement expense and U.S. taxation of foreign earnings.
Previous report
Products and Solutions income from operations for the three months ended September 27, 2025 was $140 million, an increase of $12 million, or 9.4%, as compared to the same period in 2024. The increase is primarily due to favorable price and mix shift of $13 million, lower restructuring costs of $8 million, lower bad debt expense of $7 million, and lower material, freight, and other manufacturing costs of $3 million. The increase was partially offset by lower sales volumes of $9 million, and $11 million of incremental research and development expenses related to additional headcount and third party services to develop and introduce new products into the market.
Previous report
The chart below presents net revenue and income from operations for the nine months ended September 27, 2025 and September 28, 2024.
Previous report
Products and Solutions net revenue for the nine months ended September 27, 2025 was $1,976 million, an increase of $81 million, or 4.3%, as compared to the same period in 2024. The increase is primarily due to a $95 million favorable impact from price and mix, and $3 million from favorable foreign currency exchange rates. The increase was partially offset by $16 million from lower sales volumes.
Previous report
Products and Solutions income from operations for the nine months ended September 27, 2025 was $418 million, an increase of $48 million, or 13.0%, as compared to the same period in 2024. The increase is primarily due to a favorable price and mix shift of $55 million, lower restructuring costs of $12 million, lower bad debt expense of $6 million, and lower material, freight, and other manufacturing costs of $10 million. The increase was partially offset by $23 million of incremental research and development expenses related to additional headcount and third party services to develop and introduce new products into the market, and $10 million from lower sales volumes.
Previous report
ADI Global Distribution net revenue for the three months ended September 27, 2025, was $1,203 million, an increase of $20 million, or 1.7%, as compared to the same period in 2024. The increase was primarily driven by $30 million from favorable price and mix shift, and $7 million from favorable foreign currency exchange rates. The increase was partially offset by $18 million from lower sales volumes due primarily to impacts from our ERP implementation.
Previous report
ADI Global Distribution income from operations for the three months ended September 27, 2025 was $56 million, an increase of $20 million, or 55.6%, as compared to the same period in 2024. The increase was primarily driven by $30 million from net favorable price and mix shift, and $17 million lower restructuring expenses. This increase was partially offset by incremental research and development expenses of $11 million and a decrease in sales volumes of $4 million. In addition, operating expenses increased by $9 million, including payroll, freight, and duties, driven primarily by the one-time impacts from our ERP implementation.
Previous report
The chart below presents net revenue and income from operations for the nine months ended September 27, 2025 and September 28, 2024.
Previous report
ADI Global Distribution net revenue for the nine months ended September 27, 2025 was $3,601 million, an increase of $593 million, or 19.7%, as compared to the same period in 2024. The increase was primarily driven by $446 million of revenue from the acquisition of Snap One, $102 million from higher sales volumes, $39 million from favorable price and mix shift, and $9 million from favorable foreign currency exchange rates.
Previous report
ADI Global Distribution income from operations for the nine months ended September 27, 2025 was $161 million, an increase of $14 million, or 9.5%, as compared to the same period in 2024. The increase was primarily driven by $36 million from net favorable price and mix shift, $17 million from higher sales volumes, and $14 million from lower restructuring costs. This increase was partially offset by investment of $28 million in research and development costs. In addition, operating expenses increased by $29 million, including payroll and benefits, rent, bad debt, third party spend, and freight and duties.
Previous report
Corporate costs for the three months ended September 27, 2025 were $42 million, an increase of $4 million, or 10.5%, as compared to the same period in 2024. The increase was primarily driven by $4 million of expenses related to the announced future ADI Spin-Off.
Previous report
Corporate costs for the nine months ended September 27, 2025 were $112 million, a decrease of $29 million, or 20.6%, as compared to the same period in 2024. The decrease was primarily driven by $29 million of acquisition and integration costs incurred in the prior year, and lower restructuring, impairment and extinguishment costs of $11 million. The decrease was partially offset by incremental operating costs of $8 million including payroll and benefits and third party spend, and $4 million of expenses related to the announced future ADI Spin-Off.
Previous report
Capital Resources and Liquidity
Previous report
In August 2025, subject to the terms and conditions of the Termination Agreement, we made a pre-tax, one-time cash payment of $1,590 million to Honeywell. This was partially financed in the amount of $1,225 million in incremental term loans under our A&R Credit Agreement, which mature in August 2032. The remainder of the payment to Honeywell was financed with our existing cash. Refer to Note 12. Long-Term Debt and Note 16. Commitments and Contingencies to the Unaudited Consolidated Financial Statements for further discussion.
Previous report
In August 2025, we issued $1,225 million in incremental term loans under our A&R Credit Agreement to partially finance our settlement of the Termination Agreement with Honeywell.
Previous report
For the nine months ended September 27, 2025, net cash used for operating activities was $1,436 million, a decrease of $1,677 million as compared to the same period in 2024. During the nine months ended September 27, 2025, we recorded $972 million of expense related to the termination of the Indemnification Agreement, $86 million of interest expense and $22 million of other expenses. These expenses, offset by operating profit of $467 million, were the primary drivers of the net loss of $663 million. In addition to the decrease in net income of $756 million, there was a change of $923 million in net assets and liabilities driven primarily by a $753 million decrease in the Indemnification Agreement liability and a $120 million decrease in accounts payable primarily due to the timing of payments for strategic buys.
Previous report
Net cash used for investing activities for the nine months ended September 27, 2025 was $79 million, a decrease of $1,307 million, or 94%, as compared to the same period in 2024. The decrease was primarily driven by the prior year acquisition of Snap One for $1,334 million, partially offset by an increase in capital expenditures of $21 million in the current year.
Previous report
Net cash provided by financing activities for the nine months ended September 27, 2025 was $1,159 million, an increase of $116 million, or 11%, as compared to the same period in 2024. This increase was primarily driven by a $599 million reduction in long-term debt repayments, partially offset by proceeds of $482 million related to the issuance of Preferred Stock in 2024.
Previous report
Indemnification Agreement Payments
Previous report
In connection with the Honeywell Spin-Off, we entered into the Indemnification Agreement with Honeywell. On July 30, 2025, we entered into the Termination Agreement with Honeywell to terminate the Indemnification Agreement. Subject to the terms and conditions of the Termination Agreement, we made a pre-tax, one-time cash payment of $1,590 million to Honeywell in August 2025 using proceeds from the incremental term loans issued under the A&R Credit Agreement, together with a portion of our cash on hand. We are no longer required to make any further payments to Honeywell under the Indemnification Agreement and the associated affirmative and negative covenants no longer apply. During the nine months ended September 27, 2025, we paid Honeywell $1,695 million under the Indemnification Agreement, which includes the impact of the Termination Agreement. Refer to Note 12. Long-Term Debtand Note 16. Commitments and Contingenciesfor further discussion.
Reworded paragraphs (31)
Previous wording
•our ability to spin-off ADI Global Distribution, including the timeframe and process for the same;
Current wording
•our ability to spin-off the ADI Global Distribution business, including the timeframe and process for the same and unexpected consequences of the ADI Spin-Off, including loss of customers;
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•the impact of potentially volatile global market and economic conditions and industry and end market cyclicality, including factors such as interest rates, inflation, energy costs, availability of financing, consumer spending habits and preferences, housing market changes, and employment rates;
Current wording
•the impact of potentially volatile global market, geo-political and economic conditions and industry, and end market cyclicality, including factors such as interest rates, inflation, energy costs, availability of financing, consumer spending habits and preferences, housing market changes, and employment rates;
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•the failure to acquire, implement, maintain and upgrade business technology infrastructure systems, including Enterprise Resource Planning (“ERP”) systems and the like;
Current wording
•the failure to acquire, implement, maintain and upgrade business technology infrastructure systems;
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•being required to make significant cash contributions to our defined benefit pension plans; and
Current wording
•being required to make significant cash contributions to our defined benefit pension plans;
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•regulations and societal actions to respond to global climate change;
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•regulations and societal actions to respond to global climate change; and
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•other risks detailed under the caption “Risk Factors” in this Quarterly Report, in Part II, Item 1A, and certain factors discussed elsewhere in our 2024 Annual Report on Form 10-K, and other filings we make with the SEC.
Current wording
•other risks detailed under the caption “Risk Factors” in this Quarterly Report, in Part II, Item 1A. Risk Factors, and certain factors discussed elsewhere in our 2025 Annual Report on Form 10-K and other filings we make with the SEC.
Previous wording
Other than as set forth below in Part II, Item lA, captioned “Risk Factors”, there have been no material changes to the risk factors described in our 2024 Annual Report on Form 10-K. These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Even if our results of operations, financial condition, and liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.
Current wording
There have been no material changes to the risk factors described in our 2025 Annual Report on Form 10-K. These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Even if our results of operations, financial condition and liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.
Previous wording
We are a leading global manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions that help homeowners and businesses stay connected and in control of their comfort, security, energy use, and smart living. We are a leader in key product markets including home heating, ventilation and air conditioning controls, smoke and carbon monoxide detection home safety and fire suppression, and security. Our global footprint serves residential and commercial end-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. We manage our business operations through two business segments, Products and Solutions and ADI Global Distribution.
Current wording
We are a global manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions that help homeowners and businesses stay connected and in control of their comfort, security, energy use, and smart living. We are a leading player in key product markets including home heating, ventilation, and air conditioning controls; smoke and carbon monoxide detection home safety and fire suppression; and security. Our global footprint serves residential and commercial end-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.
Previous wording
Our Products and Solutions segment is a leading building products manufacturer focused on residential controls and sensing solutions. Our offerings include temperature and humidity control, water and air solutions, smoke and carbon monoxide detection home safety products, residential and small business security products, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software. We also sell components to manufacturers of water heaters, heat pumps and boilers.
Current wording
Our Products and Solutions segment offerings include temperature and humidity control, water and air solutions, smoke and carbon monoxide detection home safety products, residential and small business security products, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software. We also sell components to manufacturers of water heaters, heat pumps, and boilers. Our products and solutions for comfort, energy management, safety, and security benefit from trusted, well-established branded offerings such as Braukmann, BRK, First Alert, Honeywell Home, Resideo, and others.
Previous wording
Our financial performance is influenced by macroeconomic factors underlying end user demand such as repair and remodeling activity, residential and non-residential construction, new and existing home sales, employment rates, interest rates and bank lending standards, and supply chain dynamics that can be influenced by geopolitics. The ongoing uncertainty and volatility in the global macroeconomic environment have affected, and could continue to affect, our visibility toward future performance. Uncertainties remain including the global tariff environment, potential for changes in inflation and interest rates, increased labor costs, reduced consumer spending due to softening labor markets, elevated mortgage rates, shifts in energy policies, and potential market and other disruption from the ongoing conflict between Russia and Ukraine as well as the Middle East crisis.
Current wording
Our financial performance is influenced by macroeconomic factors underlying end user demand such as repair and remodeling activity, residential and commercial construction, new and existing home sales, employment rates, interest rates and bank lending standards, and supply chain dynamics that can be influenced by geopolitics. The ongoing uncertainty and volatility in the global macroeconomic and political environments have affected both supply and demand dynamics, and could continue to affect our visibility toward future performance. Uncertainties remain, including the global tariff environment, geopolitical relations between and among the U.S. and other countries, potential for changes in inflation and interest rates, increased labor costs, reduced consumer spending due to softening labor markets, elevated mortgage rates, shifts in energy policies, and potential market and other disruption from any of the above.
Previous wording
•Net revenue of $1.86 billion, up 2.0% from $1.83 billion in the third quarter of 2024
Current wording
•Net revenue of $1.91 billion, up 8.0% from $1.77 billion in the first quarter of 2025
Previous wording
•Gross profit margin of 29.8%, compared to 28.7% in the third quarter of 2024
Current wording
•Gross profit margin of 28.8%, compared to 28.9% in the first quarter of 2025
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•Income from operationsof $154 million, or 8.3% of revenue, compared to $126 million, or 6.9% of revenue in thethird quarter of 2024
Current wording
•Income from operationsof $102 million, or 5.3% of revenue, compared to $136 million, or 7.7% of revenue in thefirst quarter of 2025
Previous wording
•Fully diluted earnings per common share of $0.85, compared to $0.07 diluted earnings per common share in thethird quarter of 2024
Current wording
•Fully diluted earnings per common share of $0.17, compared to diluted loss per common share of $0.02 in thefirst quarter of 2025
Previous wording
For the remainder of 2025, we anticipate executing our business operations against a highly dynamic global macroeconomic environment. The vast majority of costs associated with the building products that the Products and Solutions segment sells in the U.S. are incurred in Mexico. Most Products and Solutions products manufactured in Mexico, along with a significant portion of the ADI Global Distribution segment products sourced in Mexico, are currently exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA). Additional tariff impact relates to products imported from China (and other Asian countries) and the European Union primarily by our ADI Global Distribution segment. We intend to take actions to essentially mitigate the cost impact of any tariffs that affect our business; however, rising prices and other macroeconomics factors may lead to lower purchase levels by our customers. We are monitoring these dynamics very closely and will make adjustments in our business operation execution, as appropriate. Based on the aforementioned, we reaffirm our 2025 revenue outlook to be up low double-digits year-over-year.
Current wording
For 2026, we anticipate executing our business operations against a highly dynamic global macroeconomic environment. The vast majority of costs associated with the building products that the Products and Solutions segment sells in the U.S. are incurred in Mexico. Most Products and Solutions products manufactured in Mexico, along with a significant portion of the ADI Global Distribution segment products sourced in Mexico, are currently exempt from tariffs under the United States-Mexico-Canada Agreement (“USMCA”) or specific commodity exceptions. While imported products that are not subject to the USMCA or other exceptions are subject to the tariff surcharge of 10% implemented on February 24, 2026 (until July 24, 2026) and in some instances, the metals tariffs ranging from 15-50% on the finished goods that were implemented on April 6, 2026, we do not expect a material impact to our business due to these tariffs. We are monitoring the litigation and recent ruling from the Court of International Trade (“CIT”) on the Section 122 tariffs for potential change in status. We will continue to take actions to address the cost impact of tariffs that affect our business; however, rising prices and other macroeconomics factors may lead to lower purchase levels by our customers. We are monitoring these dynamics closely and will adjust our business operations as appropriate. Also, we anticipate slow growth in the U.S. residential housing market and a moderation of growth in the non-residential construction market. Based on the aforementioned, our 2026 revenue outlook is growth in the mid-single-digits range year-over-year.
Previous wording
Gross profit for the three months ended September 27, 2025 was $556 million, an increase of $32 million, or 6.1%, as compared to the same period in 2024, as shown in the above waterfall.
Current wording
Gross profit for the three months ended April 4, 2026 was $551 million, an increase of $40 million, or 7.8%, compared to the same period in 2025, as shown in the above waterfall.
Previous wording
Gross margin rate for the three months ended September 27, 2025 was 29.8%, an increase of 110 basis points (“bps”), as compared to the same period in 2024. The increase was primarily driven by favorable price and mix shift of 150 bps partially offset by lower margins on sales volumes of 30 bps, and higher manufacturing costs of 10 bps.
Current wording
Gross margin rate for the three months ended April 4, 2026 was 28.8%, a decrease of 10 basis points (“bps”), compared to the same period in 2025. The decrease was primarily driven by lower margins on new sales volumes of 30 bps and was partially offset by net favorable price and mix shift of 20 bps.
Previous wording
Research and development expenses for the three months ended September 27, 2025 were $44 million, an increase of $21 million or 91.3% as compared to the same period in 2024. The increase was primarily driven by investments in both segments related to incremental headcount and third party services to develop and introduce new products into the market.
Current wording
Research and development expenses for the three months ended April 4, 2026 were $48 million, an increase of $13 million, or 37.1%, compared to the same period in 2025. The increase was driven by $9 million in the Products and Solutions segment and $4 million in the ADI Global Distribution segment related to incremental headcount and third-party services to develop and introduce new products into the market.
Previous wording
Intangible asset amortization for the three months ended September 27, 2025 was $31 million, an increase of $2 million, or 6.9% as compared with the same period in 2024 primarily due to foreign currency impacts.
Current wording
Intangible asset amortization for the three months ended April 4, 2026 was $31 million, an increase of $1 million, or 3.3%, compared with the same period in 2025.
Previous wording
We incurred no Indemnification Agreement expense for the three months ended September 27, 2025, a decrease of $45 million compared to the same period of 2024. The decrease was driven by the termination of the Indemnification Agreement with Honeywell on July 30, 2025.
Current wording
We incurred no Indemnification Agreement expense for the three months ended April 4, 2026, a decrease of $90 million compared to the same period of 2025. The decrease was driven by the termination of the Indemnification Agreement with Honeywell on July 30, 2025.
Previous wording
The income tax benefit for the three months ended September 27, 2025 was $46 million compared to the income tax expense of $24 million in the same period in 2024. The decrease was primarily driven by an increase in income before taxes for the quarter and a change in projected income before taxes for the year. The effective income tax rate decreased from 54.5% to (41.8)%, primarily driven by the mix of earnings across the jurisdictions in which we operate, decreased income before taxes with relatively fixed non-deductible expenses and a large increase in the non-deductible Indemnification Agreement expense and U.S. taxation of foreign earnings.
Current wording
The effective income tax rate decreased from 60.0% to 30.9%, primarily driven by the mix of earnings across the jurisdictions in which we operate, increased income before taxes with relatively fixed non-deductible expenses and the elimination of the non-deductible Indemnification Agreement expense.
Previous wording
Products and Solutions net revenue for the three months ended September 27, 2025 was $661 million, an increase of $16 million, or 2.5%, as compared to the same period in 2024. The increase is primarily due to a $21 million favorable impact from price and mix, and $6 million from favorable foreign currency exchange rates. The increase was partially offset by $10 million from lower sales volumes.
Current wording
Products and Solutions net revenue for the three months ended April 4, 2026 was $706 million, an increase of $57 million, or 8.8%, compared to the same period in 2025. The increase is primarily driven by incremental sales days in the year-over-year reporting period, and includes a $47 million favorable impact from price and mix shift, and favorable foreign currency exchange rates of $15 million. The increase was partially offset by lower sales volumes of $6 million due primarily to the pre-tariff orders resulting in higher sales volumes in the prior period.
Previous wording
As of September 27, 2025, total cash and cash equivalents were $345 million, of which 50% were held by foreign subsidiaries. Our liquidity is primarily dependent on our ability to continue to generate positive cash flows from operations, supplemented by external sources of capital, as needed. Additional liquidity may also be provided through access to the capital markets and our A&R Revolving Credit Facility in an aggregate principal amount of $500 million.
Current wording
As of April 4, 2026, total cash and cash equivalents were $438 million, of which 50% were held by foreign subsidiaries. Our liquidity is primarily dependent on our ability to continue to generate positive cash flows from operations, supplemented by external sources of capital as needed. Additional liquidity may also be provided through access to the capital markets and our senior secured revolving credit facility in an aggregate principal amount of $500 million.
Previous wording
We may from time to time take steps to reduce our debt or otherwise improve our financial position. These actions could include prepayments, liquidated damages, open market debt repurchases, negotiated repurchases, other redemptions or retirements of outstanding debt, opportunistic refinancing of debt, raising additional capital, or divesting certain assets. The amount of prepayments or the amount of debt that may be refinanced, repurchased, or otherwise retired, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.
Current wording
We may from time to time take steps to reduce our debt or otherwise improve our financial position. These actions could include prepayments, open market debt repurchases, negotiated repurchases, other redemptions or retirements of outstanding debt, opportunistic refinancing of debt, raising additional capital, or divesting certain assets. The amount of prepayments or the amount of debt that may be refinanced, repurchased, or otherwise retired, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.
Previous wording
As of September 27, 2025, we had $3,237 million of long-term debt, including $2,337 million outstanding under our A&R Credit Agreement, $300 million 4.000% Senior Notes due 2029, and $600 million 6.500% Senior Notes due 2032. We have $20 million in outstanding debt due in the next twelve months, and $48 million of unamortized deferred financing costs. The Senior Notes due 2029 and Senior Notes due 2032 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries and rank equally with all of Resideo’s senior unsecured debt and senior to all of Resideo’s subordinated debt.
Current wording
As of April 4, 2026, we had $3,226 million of long-term debt, including $2,326 million outstanding under our A&R Credit Agreement, $300 million 4.000% Senior Notes due 2029, and $600 million 6.500% Senior Notes due 2032. We have $18 million in outstanding debt due in the next twelve months, and $43 million of unamortized deferred financing costs. The Senior Notes due 2029 and Senior Notes due 2032 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries and rank equally with all of Resideo’s senior unsecured debt.
Previous wording
We have also entered into certain interest rate swap agreements based on Term SOFR. These interest rate swap agreements effectively convert a portion of our variable-rate debt to fixed rate debt. Additionally, we assumed an interest rate cap in 2024 which effectively caps the interest on a portion of our variable rate debt with a current notional amount of $343 million and a strike rate of 4.79%.
Current wording
We have also entered into certain interest rate swaps based on Term SOFR. These interest rate swaps effectively convert a portion of our variable-rate debt to fixed rate debt.
Previous wording
Refer to Note 12. Long-Term Debt and Note 13. Derivative Financial Instruments to the Unaudited Consolidated Financial Statements for a description of our debt obligations and the timing of future principal and interest payments, including impacts from our interest rate derivatives.
Current wording
Refer to Note 11. Long-Term Debt and Note 12. Fair Value of the Notes to the Unaudited Consolidated Financial Statements for a description of our debt obligations and the timing of future principal and interest payments, including impacts from our interest rate derivatives.
Previous wording
In August 2023, we announced that our Board of Directors authorized a share repurchase program for the repurchase of up to $150 million of our common stock over an unlimited time period. During the three and nine months ended September 27, 2025, there were no common share repurchases. As of September 27, 2025, we had $108 million of authorized repurchases remaining under the Share Repurchase Program.
Current wording
In August 2023, we announced that our Board of Directors authorized a share repurchase program for the repurchase of up to $150 million of our common stock over an unlimited time period. During the three months ended April 4, 2026, there were no common share repurchases. As of April 4, 2026, we had $108 million of authorized repurchases remaining under the Share Repurchase Program.
Previous wording
Cash Flow Summary for the Nine Months Ended September 27, 2025 and September 28, 2024
Current wording
Cash Flow Summary for the Three Months Ended April 4, 2026 and March 29, 2025
Previous wording
Our cash flows from operating, investing, and financing activities for the nine months ended September 27, 2025 and September 28, 2024, as reflected in the Unaudited Consolidated Financial Statements, are summarized as follows:
Current wording
Our cash flows from operating, investing, and financing activities for the three months ended April 4, 2026 and March 29, 2025, as reflected on the Unaudited Consolidated Financial Statements, are summarized as follows:
Previous wording
We have operating lease arrangements for the majority of our manufacturing centers, distribution centers, branches, offices, engineering and lab sites, warehouses, automobiles, and certain equipment. As of September 27, 2025, we had operating lease payment obligations of $350 million, with $55 million payable within 12 months.
Current wording
We have operating lease arrangements for the majority of our branches, distribution centers, manufacturing sites, offices, engineering, lab, storage sites, automobiles, and certain equipment. As of April 4, 2026, we had operating lease payment obligations of $333 million, with $57 million payable within 12 months.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We manage our business operations through two business segments, Products and Solutions and ADI Global Distribution.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The chart below presents the drivers of the gross profit variance from thenine months ended September 28, 2024 to thenine months ended September 27, 2025.