RESIDEO TECHNOLOGIES, INC.
For the period ended Jul 4, 2026. Filed Aug 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.
Jul 4, 2026 · Filed Aug 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 2026-04-04; filed 2026-05-12.
0001740332-26-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-04; filed 2026-08-12.
0001740332-26-000025
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 120 previous paragraphs and 147 current paragraphs.
68 unchanged; 36 reworded; 35 added; 16 removed; 0 previous and 8 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 (35)
Current report
•risks and uncertainties associated with the recently completed ADI Spin-Off, including our ability to realize the anticipated benefits of the ADI Spin-Off, our dependence on transition services and other arrangements with ADIG following the separation, and changes to our capital structure, leverage, and liquidity profile resulting from the separation; and
Current report
On August 3, 2026, we completed the previously announced separation of our ADI segment through a tax-free spin-off to our shareholders. Resideo stockholders received one share of ADIG common stock for every two shares of Resideo stock outstanding and held as of the July 20, 2026 record date. Following the completion of the ADI Spin-Off, ADIG became an independent public company trading under the symbol “ADIG” on the New York Stock Exchange and Resideo retains no ownership interest in ADIG. The ADI Spin-Off is intended to qualify as a tax-free transaction for U.S. federal income tax purposes. The accompanying Unaudited Condensed Consolidated Financial Statements for the three and six months ended July 4, 2026 include the historical results of ADIG for all periods presented as the ADI Spin-Off occurred subsequent to the end of the reporting period. After the ADI Spin-Off, and in future filings, we will no longer consolidate ADIG and the historical results of ADI will be reflected as discontinued operations in Resideo’s Consolidated Financial Statements. As a result, following the completion of the ADI Spin-Off, Resideo’s consolidated revenue, operating income, and cash flows will be materially reduced and because substantially all of Resideo’s outstanding indebtedness (other than the indebtedness Resideo has disclosed transferred to ADIG and indebtedness that Resideo has paid down in connection with the ADI Spin-Off) remains with Resideo, its net leverage ratio on a standalone basis is expected to be higher than the consolidated leverage ratio reported for prior periods.
Current report
In connection with the ADI Spin-Off, we have entered into a separation and distribution agreement and certain ancillary agreements including, among others, transition services agreement, tax matters agreement, commercial products purchase agreement, employee matters agreement and intellectual property matters agreement, which govern the relationship of the parties following the ADI Spin-Off.
Current report
Current Quarter Highlights
Current report
•Revenue of $1.98 billion, up 2.0% from $1.94 billion in the second quarter of 2025
Current report
Revenue
Current report
Revenue for the three months ended July 4, 2026 was $1,981 million, an increase of $38 million, or 2.0%, compared to the same period in 2025. The increase was primarily due to $30 million from favorable price and mix shift, and $6 million from favorable foreign currency exchange rates.
Current report
Revenue for the six months ended July 4, 2026 was $3,893 million, an increase of $180 million, or 4.8%, compared to the same period in 2025. The increase was primarily due to $120 million from favorable price and mix shift, $36 million from favorable foreign currency exchange rates, and $27 million from higher sales volumes, partially attributable to the incremental days in the year-over-year reporting period.
Current report
Gross margin rate for the three months ended July 4, 2026 was 30.0%, an increase of 70 bps, compared to the same period in 2025. The increase was primarily driven by a 140 bps benefit from tariff refunds, and 60 bps from higher margins on new sales volumes. The increase was partially offset by an unfavorable price and mix shift of 130 bps and higher manufacturing costs of 10 bps.
Current report
Gross profit for the six months ended July 4, 2026 was $1,146 million, an increase of $66 million, or 6.1%, as compared to the same period in 2025, as shown in the above waterfall.
Current report
Selling, general and administrative expenses for the three months ended July 4, 2026 were $332 million, an increase of $13 million, or 4.1%, compared to the same period in 2025. The increase was primarily driven by an increase in operating costs including people costs, litigation reserves, rent, and third-party spend.
Current report
Business separation costs for the six months ended July 4, 2026 were $55 million. These expenditures are non-recurring in nature and included third‑party advisory, consulting, legal, and other incremental separation‑related costs incurred in connection with the ADI Spin-Off.
Current report
Other (Income) Expense, Net
Current report
Other income, net for the three months ended July 4, 2026 was $81 million, an increase of $90 million, compared to the same period in 2025. The increase was primarily attributable to a $77 million benefit recognized in the current period in connection with the settlement and termination of the Tax Matters Agreement with Honeywell, a $4 million gain in the current period on the sale of certain assets, and a $11 million favorable impact of foreign exchange rates compared to the prior period.
Current report
Other income, net for the six months ended July 4, 2026 was $81 million, an increase of $96 million, compared to the same period in 2025. The increase was primarily attributable to a $77 million benefit recognized in the current period in connection with the settlement and termination of the Tax Matters Agreement with Honeywell, a $5 million gain in the current period on the sale of certain assets and a $15 million favorable impact of foreign exchange rates compared to the prior period.
Current report
Income tax expense for the three months ended July 4, 2026 was $69 million, a decrease of $18 million or 20.7%, compared to the same period in 2025. The decrease was primarily driven by the one-time non-deductible Indemnification expense that occurred during 2025.
Current report
Income tax expense for the six months ended July 4, 2026 was $86 million, a decrease of $10 million or 10.4%, compared to the same period in 2025. The decrease was primarily driven by the one-time non-deductible Indemnification expense that occurred during 2025.
Current report
The chart below presents Revenue and Income from operations for the three months ended July 4, 2026 and June 28, 2025.
Current report
Products and Solutions Revenue for the three months ended July 4, 2026 was $695 million, an increase of $29 million, or 4.4%, compared to the same period in 2025. The increase is primarily driven by $32 million from higher sales volumes, and $2 million from favorable foreign currency exchange rates, partially offset by an unfavorable impact from price and mix shift of $5 million.
Current report
Products and Solutions Income from operations for the three months ended July 4, 2026 was $138 million, a decrease of $4 million, or 2.8%, compared to the same period in 2025. The decrease is primarily driven by $12 million from unfavorable price and mix shift, $10 million of higher restructuring expenses, $5 million of higher research and development expenses and $4 million of legal settlement costs, partially offset by $19 million from higher sales volumes and a net $7 million favorable impact from freight, duties, tariff refunds and other supply chain impacts.
Current report
The chart below presents Revenue and Income from operations for the six months ended July 4, 2026 and June 28, 2025.
Current report
Products and Solutions Income from operations for the six months ended July 4, 2026 was $266 million, a decrease of $12 million, or 4.3%, compared to the same period in 2025. The decrease is primarily driven by approximately $22 million of legal settlement costs, $17 million of higher restructuring expenses, and $14 million of higher research and development expenses. The decrease was partially offset by $13 million from higher sales volumes, $10 million from favorable price and mix shift, and a net $17 million favorable impact from lower manufacturing costs, supply chain efficiencies, and tariff refunds.
Current report
The chart below presents Revenue and Income from operations for the three months ended July 4, 2026 and June 28, 2025.
Current report
ADI Global Distribution Revenue for the three months ended July 4, 2026 was $1,286 million, an increase of $9 million, or 0.7%, compared to the same period in 2025. The increase was primarily driven by $35 million from favorable price and mix shift, and $3 million from favorable foreign currency exchange rates, partially offset by lower sales volumes of $31 million.
Current report
ADI Global Distribution Income from operations for the three months ended July 4, 2026 was $64 million, a decrease of $7 million, or 9.9%, compared to the same period in 2025. The decrease was primarily driven by higher selling, general and administrative expenses of $8 million, lower sales volumes of $7 million, unfavorable price and mix shift of $5 million, higher restructuring expenses of $4 million, and higher research and development costs of $2 million. The decrease was partially offset by $20 million of tariff refunds.
Current report
The chart below presents Revenue and Income from operations for the six months ended July 4, 2026 and June 28, 2025.
Current report
ADI Global Distribution Revenue for the six months ended July 4, 2026 was $2,492 million, an increase of $94 million, or 3.9%, compared to the same period in 2025. The increase was primarily driven by $77 million from favorable price and mix shift, and favorable foreign currency exchange rates of $18 million.
Current report
Corporate costs for the six months ended July 4, 2026 were $131 million, an increase of $61 million, or 87.1%, compared to the same period in 2025. The increase was primarily driven by business separation costs of $55 million incurred in connection with the ADI Spin-Off and included third‑party advisory, consulting, legal, and other incremental separation‑related costs, as well as $5 million of debt related restructuring and extinguishment costs.
Current report
We entered into a definitive agreement with Honeywell to terminate the Tax Matters Agreement, which resulted in a pre-tax, one-time payment of approximately $12 million to Honeywell in June 2026. Refer to Note 14. Commitments and Contingenciesof the Notes to the Unaudited Condensed Consolidated Financial Statements for further discussion.
Current report
Second A&R Credit Agreement, Senior Unsecured Notes and Credit Agreement of ADIG
Current report
On June 4, 2026, we amended our A&R Credit Agreement in order to facilitate the ADI Spin-Off and extend the revolver for a new 5-year term, now due 2031 (the “Second A&R Credit Agreement”). Following the amendment, our Second A&R Credit Agreement continues to provide an important source of liquidity and financial flexibility, subject to the terms, conditions and covenants contained therein.
Current report
The 7.125% Senior Notes due 2034 were issued on June 30, 2026 in connection with the anticipated ADI Spin-Off. The gross proceeds from the offering were deposited into a segregated escrow account pending satisfaction of the applicable escrow release conditions and consummation of the ADI Spin-Off. As of July 4, 2026, the proceeds from the offering were included in Restricted cash on our Unaudited Condensed Consolidated Balance Sheets. The net proceeds were released from escrow to ADIG upon consummation of the ADI Spin-Off and satisfaction of the escrow release conditions.
Current report
On July 1, 2026, ADIG entered into a senior secured Credit Agreement that provides for $600 million of term loans and a $500 million revolving credit facility. The Credit Agreement became effective on the ADI Spin-Off date. The net proceeds from the issuance of the senior notes and borrowings under the term loan facility were used in part to fund a one-time cash dividend of $900 million to Resideo. We used the proceeds received from ADIG to repay in full $518 million of senior secured term loans that were to mature in February 2028 and to repay $382 million of senior secured term loans maturing in June 2031. In connection with the ADI Spin-Off, we expect by the end of the third quarter to make an additional repayment of approximately $200 million under our A&R Term B Facility following the completion of the post-closing cash adjustment contemplated by the separation and distribution agreement.
Current report
Net cash provided by operating activities for the six months ended July 4, 2026 was $3 million, compared to $135 million in the same period in 2025. The $132 million decrease in cash provided by operating activities was primarily driven by a $1,146 million unfavorable change in working capital, partially offset by increased net income of $954 million and higher non-cash adjustments of $60 million. The unfavorable change in working capital is primarily related to the $902 million termination of the Indemnification liability, $123 million cash paid for previously accrued liabilities, $64 million from accounts receivable related to increased sales and timing, and $49 million from higher inventory levels to support the business. The favorable non-cash adjustment related primarily to a $39 million increase in Deferred income taxes related to the settlement of the Tax Matters Agreement, and $22 million of higher restructuring expenses related to the transformation of the business.
Current report
Operating Lease
Removed paragraphs (16)
Previous report
•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;
Previous report
Current Period Highlights
Previous report
•Net revenue of $1.91 billion, up 8.0% from $1.77 billion in the first quarter of 2025
Previous report
N/A = Not applicable or not meaningful
Previous report
Net Revenue
Previous 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.
Previous report
Other Expense (Income), Net
Previous 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.
Previous 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.
Previous report
The chart below presents net revenue and income from operations for the three months ended April 4, 2026 and March 29, 2025.
Previous 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.
Previous report
The chart below presents net revenue and income from operations for the three months ended April 4, 2026 and March 29, 2025.
Previous 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.
Previous report
A&R Credit Agreement and Senior Notes
Previous 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.
Previous report
Operating Leases
Reworded paragraphs (36)
Previous wording
The following information should be read in conjunction with the Unaudited Consolidated Financial Statements included herein under “Item 1. Financial Statements.” and the Audited Consolidated Financial Statements and the notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) included in our 2025 Annual Report on Form 10-K.
Current wording
The following information should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements included herein under “Item 1. Financial Statements.” and the Audited Consolidated Financial Statements and the notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K.
Previous 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;
Current wording
•the impact of potentially volatile global market, geopolitical 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;
Previous wording
•regulations and societal actions to respond to global climate change; and
Current wording
•regulations and societal actions to respond to global climate change;
Previous 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.
Current wording
Other than as described in Part II, Item 1A. Risk Factors, of this Quarterly Report, 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 manage our business operations through two business segments, Products and Solutions and ADI Global Distribution.
Current wording
We historically managed our business operations through two business segments, Products and Solutions and ADI Global Distribution.
Previous wording
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 wording
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 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.
Previous wording
•Gross profit margin of 28.8%, compared to 28.9% in the first quarter of 2025
Current wording
•Gross profit margin of 30.0%, compared to 29.3% in the second quarter of 2025
Previous 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
Current wording
•Income from operations of $131 million, or 6.6% of revenue, compared to $177 million, or 9.1% of revenue in the second quarter of 2025
Previous 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
Current wording
•Fully diluted earnings per common share of $0.51, compared to fully diluted loss per common share of $5.59 in the second quarter of 2025
Previous 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.
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 sensing and control products that Resideo sells in the U.S. are incurred in Mexico. Most Resideo products manufactured in Mexico are currently duty free under the United States-Mexico-Canada Agreement (“USMCA”) or qualify for specific commodity exceptions to recent tariffs. While imported products that are not subject to the USMCA or other exceptions are subject to the new Section 301 tariffs of 10% - 12.5% implemented on July 24, 2026 and, in some instances, the Section 232 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 U.S. Court of International Trade on tariffs. 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. We anticipate slow growth in the U.S. residential housing market and a moderation of growth in the non-residential construction market. In addition, we anticipate a continued slowdown with a large OEM security customer during the second half of 2026 relative to second half of 2025. Based on the aforementioned, our 2026 revenue outlook is growth in the low-to-mid-single-digits range year-over-year.
Previous 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.
Current wording
Gross profit for the three months ended July 4, 2026 was $595 million, an increase of $26 million, or 4.6%, compared to the same period in 2025, as shown in the above waterfall.
Previous 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.
Current wording
Gross margin rate for the six months ended July 4, 2026 was 29.4%, an increase of 30 bps as compared to the same period in 2025. The increase was primarily driven by a 70 bps benefit from tariff refunds, and 10 bps from higher margins on new sales volumes. The increase was partially offset by an unfavorable price and mix shift of 60 bps.
Previous 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.
Current wording
Research and development expenses for the three months ended July 4, 2026 were $48 million, an increase of $7 million, or 17.1%, compared to the same period in 2025. The increase was driven by $5 million in the Products and Solutions segment and $2 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
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 wording
Selling, general and administrative expenses for the six months ended July 4, 2026 were $672 million, an increase of $47 million, or 7.5%, compared to the same period in 2025. The increase was primarily driven by legal settlement costs of $23 million, and a $19 million increase in operating costs including people costs, rent, and third-party spend, partially attributable to the incremental days in the year-over-year reporting period.
Previous wording
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 wording
Restructuring expenses for the three months ended July 4, 2026 were $22 million, an increase of $20 million, compared to the same period in 2025. The increase was driven by $15 million of employee termination costs related to our ongoing transformation initiatives, including changes to our global manufacturing footprint and workforce alignment, and $5 million of debt related restructuring and extinguishment costs.
Previous wording
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 wording
Business separation costs for the three months ended July 4, 2026 were $31 million. These expenditures are non-recurring in nature and included third‑party advisory, consulting, legal, and other incremental separation‑related costs incurred in connection with the ADI Spin-Off.
Previous 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.
Current wording
We incurred no Indemnification Agreement expense for the three months ended July 4, 2026, a decrease of $882 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
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 wording
Interest expense, net for the three months ended July 4, 2026 was $46 million, an increase of $22 million, or 91.7%, 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 $20 million of higher interest expense.
Previous 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.
Current wording
The effective income tax rate increased from (11.8)% to 41.6%, 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 derecognition of certain deferred tax assets related to the settlement of the Tax Matters Agreement.
Previous 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.
Current wording
Products and Solutions Revenue for the six months ended July 4, 2026 was $1,401 million, an increase of $86 million, or 6.5%, compared to the same period in 2025. The increase is primarily driven by a $42 million favorable impact from price and mix shift, $26 million from higher sales volumes partially attributable to incremental sales days in the year-over-year reporting period, and favorable foreign currency exchange rates of $17 million.
Previous wording
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 wording
ADI Global Distribution Income from operations for the six months ended July 4, 2026 was $98 million, a decrease of $7 million, or 6.7%, compared to the same period in 2025. The decrease was primarily driven by an increase in selling, general and administrative expenses of $21 million, higher freight and duty costs of $8 million, and higher research and development expenses of $6 million. The decrease was partially offset by $20 million of tariff refunds, $4 million from favorable price and mix shift, and lower accrued bonus of $3 million.
Previous wording
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 wording
Corporate costs for the three months ended July 4, 2026 were $71 million, an increase of $35 million, or 97.2%, compared to the same period in 2025. The increase was primarily driven by business separation costs of $31 million incurred in connection with the ADI Spin-Off and included third‑party advisory, consulting, legal, and other incremental separation‑related costs, as well as $5 million of debt related restructuring and extinguishment costs.
Previous 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.
Current wording
As of July 4, 2026, we had $549 million of cash and cash equivalents, of which 46% were held by foreign subsidiaries. Additionally, we have $400 million of restricted cash proceeds from the ADIG notes offering that were deposited into a separate escrow account. The net proceeds were released to ADIG upon consummation of the ADI Spin-Off and satisfaction of the escrow release conditions. 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
Our future capital requirements will depend on many factors, including acquisition or strategic transactions we may enter into such as the announced future ADI Spin-Off, the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies, and the expansion of our sales and marketing activities. While we may elect to seek additional funding at any time, we believe our existing cash, cash equivalents, and availability under our credit facilities are sufficient to meet our capital requirements for the foreseeable future.
Current wording
Our future capital requirements will depend on many factors, including acquisition or strategic transactions we may enter into, the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies, and the expansion of our sales and marketing activities. While we may elect to seek additional funding at any time, we believe our existing cash, cash equivalents, and availability under our credit facilities are sufficient to meet our capital requirements for the foreseeable future.
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, 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 and equity, 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 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.
Current wording
As of July 4, 2026, we had $3,622 million of gross long-term debt outstanding, including $2,322 million outstanding under our Second A&R Credit Agreement, $300 million 4.000% Senior Notes due 2029, $600 million 6.500% Senior Notes due 2032, and $400 million 7.125% Senior Notes due 2034 that transferred to ADIG upon completion of the ADI Spin-Off on August 3, 2026. We have $18 million in outstanding debt due in the next twelve months, and $44 million of unamortized deferred financing costs. There were no outstanding borrowings and no letters of credit issued under the A&R Revolving Credit Facility as of July 4, 2026.
Previous wording
As of April 4, 2026, we were in compliance with all covenants related to the A&R Credit Agreement, Senior Notes due 2029, and Senior Notes due 2032.
Current wording
As of July 4, 2026, we were in compliance with all covenants related to the Second A&R Credit Agreement, Senior Notes due 2029, Senior Notes due 2032, and Senior Notes due 2034.
Previous 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.
Current wording
Refer to Note 11. Long-Term Debt and Note 12. Fair Value of the Notes to the Unaudited Condensed 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 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.
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 and six months ended July 4, 2026, there were no common share repurchases. As of July 4, 2026, we had approximately $108 million of authorized repurchases remaining under the Share Repurchase Program.
Previous wording
Cash Flow Summary for the Three Months Ended April 4, 2026 and March 29, 2025
Current wording
Cash Flow Summary for the Six Months Ended July 4, 2026 and June 28, 2025
Previous 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:
Current wording
Our cash flows from operating, investing, and financing activities for the six months ended July 4, 2026 and June 28, 2025, as reflected on the Unaudited Condensed Consolidated Financial Statements, are summarized as follows:
Previous wording
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 wording
Net cash used for investing activities for the six months ended July 4, 2026 was $55 million, compared to a $51 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 $14 million increase in capital expenditures in 2026 to enhance our operations, partially offset by a $10 million source of cash from other investing activities in the current year, consisting primarily of proceeds from asset sales.
Previous wording
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.
Current wording
Net cash provided by financing activities for the six months ended July 4, 2026 was $342 million, compared to a $33 million use of cash for financing activities in the same period in 2025. The $375 million increase in cash provided in the current period was driven primarily by $400 million of proceeds from the Senior Notes due 2034. These proceeds are included in Restricted cash on our Unaudited Condensed Consolidated Balance Sheets and were released to ADIG upon consummation of the ADI Spin-Off and satisfaction of the escrow release conditions. This is partially offset by an increase of $17 million in cash used to acquire treasury stock in connection with stock award withholdings a $7 million increase in long-term debt repayments in 2026 as compared to the same period in 2025.
Previous 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.
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 July 4, 2026, we had operating lease payment obligations of $327 million, with $59 million payable within 12 months.
Previous wording
Refer to Note 14. Commitments and Contingencies for further discussion.
Current wording
Refer to Note 14. Commitments and Contingencies of the Notes to the Unaudited Condensed Consolidated Financial Statements for further discussion.
Previous wording
Refer to Note 2. Summary of Significant Accounting Policies for further discussion.
Current wording
Refer to Note 2. Summary of Significant Accounting Policies of the Notes to the Unaudited Condensed Consolidated Financial Statements for further discussion.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
The chart below presents the drivers of the gross profit variance from thesix months ended June 28, 2025 to the six months ended July 4, 2026.
Current report — wording carried from elsewhere
Research and development expenses for the six months ended July 4, 2026 were $96 million, an increase of $20 million, or 26.3%, compared to the same period in 2025. The increase was driven by $14 million in the Products and Solutions segment and $6 million in the ADI Global Distribution segment related to incremental headcount and third-party services to develop and introduce new products into the market.
Current report — wording carried from elsewhere
Intangible asset amortization for the six months ended July 4, 2026 was $62 million, an increase of $2 million, or 3.3%, compared with the same period in 2025.
Current report — wording carried from elsewhere
Restructuring expenses for the six months ended July 4, 2026 were $28 million, an increase of $22 million compared to the same period in 2025. The increase was primarily driven by $17 million of employee termination costs related to our ongoing transformation initiatives, including changes to our global manufacturing footprint and workforce alignment, and $5 million of debt related restructuring and extinguishment costs.
Current report — wording carried from elsewhere
We incurred no Indemnification Agreement expense for the six months ended July 4, 2026, a decrease of $972 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.
Current report — wording carried from elsewhere
Interest expense, net for the six months ended July 4, 2026 was $93 million, an increase of $44 million, or 89.8%, 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 $43 million of higher interest expense.
Current report — wording carried from elsewhere
The effective income tax rate increased from (13.3)% to 38.9%, 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 derecognition of certain deferred tax assets related to the settlement of the Tax Matters Agreement.
Current report — wording carried from elsewhere
The 4.000% Senior Notes due 2029 and the 6.500% 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.