RESIDEO TECHNOLOGIES, INC.
For the period ended Jul 4, 2026. Filed Aug 12, 2026.
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Jul 4, 2026 · Filed Aug 12, 2026
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Item 1A. Risk Factors
We face a variety of risks that are inherent in our business and our industry, including operational, legal, and regulatory risks. Such risks could cause our actual results to differ materially from our forward-looking statements, expectations, and historical trends. Other than as set forth below, there have been no material changes to the risk factors described in our 2025 Annual Report on Form 10-K.
The spin-off of ADI Global Distribution business will impact Resideo’s financial results and leverage.
For the six months ended July 4, 2026 and the year ended December 31, 2025 the ADI business contributed 64% of Resideo’s consolidated revenue. For the six months ended July 4, 2026 and the year ended December 31, 2025 ADI contributed 27% and 28% of Resideo’s consolidated Income from operations, respectively. Following the completion of the ADI Spin-Off on August 3, 2026, Resideo is a smaller, less diversified company that no longer benefits from the scale, revenue base, earnings and cash flows of ADI. Additionally, following the ADI Spin-Off, substantially all of Resideo’s pre-existing indebtedness remains with Resideo, while ADI’s revenue and cash flow contribution have been removed, resulting in a higher leverage profile on a standalone basis for Resideo.
In connection with the ADI Spin-Off, Resideo entered into a series of transaction agreements which will, among other things, govern the provision of critical services between ADIG and Resideo.
In connection with the ADI Spin-Off, Resideo and ADIG entered into various transaction agreements that each company will depend on following the ADI Spin-Off, including a separation agreement, transition services agreement, employee matters agreement, tax matters agreement, intellectual property matters agreement, a commercial product purchase agreement and related reorganization documents. Resideo’s business could be adversely affected if ADIG or Resideo do not perform these agreements as expected. Copies of these agreements which are deemed material have been filed by Resideo with the SEC, and a summary of the material terms of the agreements can be found in the section entitled “Certain Relationships and Related Party Transactions—Agreements with Resideo” in ADI’s Information Statement, dated July 1, 2026, which was included as Exhibit 99.1 to ADI’s Form 10 filed with the SEC on July 1, 2026. For instance, there may be instances where Resideo may rely on ADIG for certain corporate and shared services for a limited period. Even if ADIG does perform under the terms of the transition services agreement, these services may not fully meet Resideo’s needs and Resideo’s ability to change or reprice them will be limited, and, upon expiration, Resideo may be unable to replace them on comparable terms, which could increase its costs or impair service quality. Resideo is also obligated to provide certain services to ADIG during the transition period, which could divert management attention and resources from Resideo’s operations.
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