RESIDEO TECHNOLOGIES, INC.
For the period ended Oct 3, 2026. Filed Nov 10, 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.
Oct 3, 2026 · Filed Nov 10, 2026
REZI$19.45-3.0%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious 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 OperationsCurrent report: 10-Q
Period ended 2026-10-03; filed 2026-11-10.
0001740332-26-000031
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 147 previous paragraphs and 138 current paragraphs.
68 unchanged; 40 reworded; 27 added; 38 removed; 1 previous and 3 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 (27)
Current report
•our dependence on a select group of large customers as significant customers, including ADIG, as significant customers and our ability to maintain our commercial relationships with such customers on favorable terms;
Current report
•seasonal fluctuations and longer term trends in climate and weather conditions affecting demand for our products;
Current report
•our ability to implement pricing actions;
Current report
•ability to reduce our financial leverage and interest expense and to achieve our liquidity expectations;
Current report
•Revenue of $727 million, up 3.4% from $703 million in the third quarter of 2025
Current report
•Repaid $1.1 billion of gross debt; total gross debt of $2.1 billion at end of third quarter
Current report
Demand for many of our products is seasonal and affected by the severity of weather conditions, and following the ADI Spin-Off, we expect seasonality and severity of weather to have a greater effect on our results. In addition, following the ADI Spin-Off, ADIG is a significant third-party customer, with sales to ADIG of $43 million and $126 million for the three and nine months ended October 3, 2026, respectively.
Current report
During the third quarter of 2026, in connection with the ADI Spin-Off, we transitioned to a realigned organizational reporting structure consistent with the manner in which our Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), assesses performance and allocates resources. Following the realignment, the Company manages its continuing operations as a single operating segment and, therefore, has one reportable segment.
Current report
Unless otherwise noted, the discussion and analysis below relates to continuing operations and excludes the results of ADI Global Distribution, which are presented as discontinued operations for all periods presented. Revenue from continuing operations has been recast to reflect prior intercompany sales that occurred between Resideo and ADIG as third-party sales.
Current report
Revenue for the three months ended October 3, 2026 was$727 million, an increase of $24 million, or 3.4%, compared to the same period in 2025. The increase was primarily due to $29 million from favorable price, partially offset by $4 million of unfavorable impacts from foreign currency exchange rates and $2 million from lower sales volume.
Current report
Revenue excluding OEM Security of $694 million was up 6.3% compared to $653 million in the third quarter of 2025 and
Current report
grew year-over-year across all sales channels and product categories driven by pricing and higher sales volume. OEM Security revenue of $33 million was down 34% compared to sales of $50 million in the third quarter of 2025 due to reduced volumes from a large OEM Security customer.
Current report
Revenue for the nine months ended October 3, 2026 was$2,217 million, an increase of $109 million, or 5.2%, compared to the same period in 2025. The increase was primarily due to $72 million from pricing, $24 million from higher sales volumes, and $14 million favorable impacts from foreign currency exchange rates.
Current report
Revenue for the nine months ended October 3, 2026 excluding OEM Security was $2,090 million, an increase of $118 million, or 6.0%, compared to the same period in 2025, driven by pricing, higher sales volumes and favorable impacts of foreign exchange rates. OEM Security revenue of $127 million was down 7% compared to $136 million in the same period in 2025 due to reduced volumes from a large OEM Security customer.
Current report
Selling, general and administrative expenses for the three months ended October 3, 2026 were$159 million, an increase of $24 million, or 17.8%, compared to the same period in 2025. The increase was primarily driven by $30 million of third‑party advisory and other costs incurred in connection with the ADI Spin-off, partially offset by $6 million of lower people costs.
Current report
Restructuring, Impairment, and Extinguishment Costs
Current report
Other expense, net for the three months ended October 3, 2026 was$3 million, a decrease of $3 million, compared to the same period in 2025. The decrease was primarily attributable to $3 million of favorable impacts from foreign exchange rates compared to the prior period.
Current report
Interest expense, net for the nine months ended October 3, 2026 was $97 million, an increase of $16 million, or 19.8%, compared to the same period in 2025. The increase was primarily driven by higher outstanding debt.
Current report
Income tax expense for the three months ended October 3, 2026 was $7 million, an increase of $27 million or 135.0%, compared to the same period in 2025. The increase was primarily driven by an increase in the effective tax rate, partially offset by a $32 million decrease in income before taxes.
Current report
Income tax expense for the nine months ended October 3, 2026 was $88 million, an increase of $110 million or 500.0%, compared to the same period in 2025. The increase was primarily driven by an increase in projected income before taxes for the year and an increase in the effective tax rate.
Current report
Income from Discontinued Operations, Net of Taxes
Current report
For the three months ended October 3, 2026, the loss from discontinued operations, net of taxes, was $9 million, reflecting $1 million operating loss, $6 million of interest expense and $4 million of other expense, partially offset by a $2 million income tax benefit. Operating loss included $9 million of business separation costs incurred in connection with the ADI Spin-Off.
Current report
Loss from discontinued operations, net of taxes, for the nine months ended October 3, 2026 was $13 million, reflecting operating income of $29 million, more than offset by $33 million of interest expense, $6 million of other expense and $3 million of income tax expense. Operating income included $64 million of business separation costs incurred in connection with the ADI Spin-Off.
Current report
Second A&R Credit Agreement and Senior Unsecured Notes
Current report
As of October 3, 2026, we had interest rate swaps with a notional value of $140 million. Our interest rate swaps are designated as cash flow hedges of the variability in interest payments associated with a portion of our variable-rate debt equal to the swap notional amount, effectively converting the hedged debt from a variable interest rate based on Term SOFR to a fixed rate over the remaining term to maturity in February 2027.
Current report
Summary of Cash Flows from Continuing Operations for the Nine Months Ended October 3, 2026 and September 27, 2025
Current report
$71 million from higher inventory levels to support the business, partially offset by a $61 million increase in accounts payable and accrued liabilities.
Removed paragraphs (38)
Previous report
We historically managed our business operations through two business segments, Products and Solutions and ADI Global Distribution.
Previous 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 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 report
•Revenue of $1.98 billion, up 2.0% from $1.94 billion in the second quarter of 2025
Previous 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.
Previous 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.
Previous report
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 report
Restructuring Expenses
Previous report
Business Separation Costs
Previous report
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 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.
Previous report
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 report
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.
Previous 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.
Previous 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.
Previous report
Segment Results of Operations
Previous report
Products and Solutions
Previous report
The chart below presents Revenue and Income from operations for the three months ended July 4, 2026 and June 28, 2025.
Previous 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.
Previous 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.
Previous report
The chart below presents Revenue and Income from operations for the six months ended July 4, 2026 and June 28, 2025.
Previous report
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 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.
Previous report
ADI Global Distribution
Previous report
The chart below presents Revenue and Income from operations for the three months ended July 4, 2026 and June 28, 2025.
Previous 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.
Previous 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.
Previous report
The chart below presents Revenue and Income from operations for the six months ended July 4, 2026 and June 28, 2025.
Previous 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.
Previous report
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 report
Corporate
Previous report
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 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.
Previous 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.
Previous report
Second A&R Credit Agreement, Senior Unsecured Notes and Credit Agreement of ADIG
Previous report
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 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.
Previous report
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 report
Cash Flow Summary for the Six Months Ended July 4, 2026 and June 28, 2025
Reworded paragraphs (40)
Previous wording
•the potential adverse impacts of tariffs, import/export restrictions, or other trade barriers on global economic conditions, financial markets and our business;
Current wording
•the potential adverse impacts of tariffs (including the timing, amount and recoverability of tariff refunds or claims in relation to refunds), import/export restrictions, or other trade barriers on global economic conditions, financial markets and our business;
Previous 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;
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, costs of raw materials and components, fuel and shipping costs, availability of financing, consumer spending habits and preferences, repair and remodeling activity, residential and commercial construction, housing market changes, labor costs, and employment rates;
Previous wording
•uncertainty in the development, deployment, and the use of artificial intelligence in our products and services, as well as our business interests more broadly;
Current wording
•uncertainty in the development, deployment, and the use of artificial intelligence in our products and services and internal systems, as well as our business interests more broadly;
Previous wording
•Gross profit margin of 30.0%, compared to 29.3% in the second quarter of 2025
Current wording
•Gross profit margin of 40.4%, an increase of four basis points compared to the third quarter of 2025
Previous 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
Current wording
•Operating income of $72 million, or 9.9% of revenue, compared to $106 million, or 15.1% of revenue in the third quarter of 2025
Previous 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
Current wording
•Fully diluted earnings from per share from continuing operations attributable to common shareholders of $0.14, compared to fully diluted earnings per share from continuing operations of $0.49 in the third 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 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.
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 macroeconomic factors may lead to lower purchase levels by our customers. We are monitoring these dynamics closely and will adjust our business operations as appropriate.
Previous 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.
Current wording
We are a global building technologies company that is a leading developer and manufacturer of critical control and sensing solutions for residential and commercial markets. We serve professional installers and integrators across diverse product categories, such as heating, ventilation, and air conditioning controls; combustion; life safety; security; and water. Our comfort and protection solutions are sold under trusted well-established brands, such as Braukmann, BRK, First Alert, and Honeywell Home, and can be found in more than 150 million residential and commercial spaces globally, with tens of millions of new devices sold annually.
Previous 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.
Current wording
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, cloud infrastructure, installation and maintenance tools, and related software. We also sell components to manufacturers of water heaters, heat pumps, and boilers. These products fall into our Air, Water, Safety, Security and Combustion categories that are sold through the distribution, retail and OEM combustion channels.
Previous wording
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 wording
On August 3, 2026, we completed the separation of our former 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 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. Management concluded that the disposal of ADIG represented a strategic shift that had a major effect on Resideo’s operations and financial results. Accordingly, the operating results of ADIG are presented as discontinued operations in the accompanying Unaudited Condensed Consolidated Financial Statements for all periods presented. Refer to Note 3. Discontinued Operationsfor further discussion.
Previous wording
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 wording
In connection with the ADI Spin-Off, we have entered into a separation and distribution agreement and certain ancillary agreements including, among others, a transition services agreement, a tax matters agreement, a commercial products purchase agreement, an employee matters agreement, and an intellectual property matters agreement, which govern the relationship of the parties following the ADI Spin-Off.
Previous 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.
Current wording
Gross profit for the three months ended October 3, 2026 was$294 million, an increase of $10 million, or 3.5%, compared to the same period in 2025, as shown in the above waterfall.
Previous 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.
Current wording
Gross margin rate for the three months ended October 3, 2026 was 40.4%, an increase of 4 basis points compared to the same period in 2025. The impact of 230 bps from higher manufacturing costs was offset by 90 bps from tariff refunds, 60 bps from net favorable price and mix shift, 40 bps from higher margins on new volumes, 30 bps from a shift in expenditures resulting in lower maintenance costs and higher research and development qualifying spend, and 10 bps from foreign currency exchange rates.
Previous wording
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 wording
The chart below presents the drivers of the gross profit variance from thenine months ended September 27, 2025 to the nine months ended October 3, 2026.
Previous wording
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 wording
Gross profit for the nine months ended October 3, 2026 was$892 million, an increase of $54 million, or 6.4%, compared to the same period in 2025, as shown in the above waterfall.
Previous wording
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 wording
Gross margin rate for the nine months ended October 3, 2026 was 40.2%, an increase of 40 bps as compared to the same period in 2025. The increase was primarily driven by a 60 bps benefit from tariff refunds, 40 bps from a shift in expenditures resulting in lower maintenance costs and higher research and development qualifying spend, and 30 bps from higher margins on new sales volumes. The increase was partially offset by higher manufacturing costs of 70 bps, net unfavorable price and mix margin impact of 10 bps, and 10 bps from foreign currency exchange rates.
Previous 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.
Current wording
Research and development expenses for the three months ended October 3, 2026 were$37 million, an increase of $4 million, or 12.1%, compared to the same period in 2025. The increase was driven by incremental headcount and third-party services to develop and introduce new products into the market.
Previous wording
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 wording
Research and development expenses for the nine months ended October 3, 2026 were$110 million, an increase of $19 million, or 20.9%, compared to the same period in 2025. The increase was driven by 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 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 wording
Selling, general and administrative expenses for the nine months ended October 3, 2026 were$445 million, an increase of $42 million, or 10.4%, compared to the same period in 2025. The increase was primarily driven by $30 million of third‑party advisory and other costs incurred in connection with the ADI Spin-off, $24 million of legal settlements and $5 million of unfavorable foreign currency exchange rate impacts, partially offset by $17 million lower operating costs including people costs, bad debt, and third-party spend.
Previous wording
Intangible asset amortization for the three months ended July 4, 2026 was $31 million, an increase of $1 million, or 3.3%, compared with the same period in 2025.
Current wording
Intangible asset amortization for the three months ended October 3, 2026 was$6 million, a decrease of $1 million, or 14.3%, compared with the same period in 2025.
Previous wording
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 wording
Intangible asset amortization for the nine months ended October 3, 2026 was$19 million, a decrease of $2 million, or 9.5%, compared with the same period in 2025.
Previous 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.
Current wording
Restructuring expenses for the three months ended October 3, 2026 were$20 million, an increase of $17 million, compared to the same period in 2025. The increase was driven by $7 million of incremental debt modification and extinguishment costs, $7 million of employee termination costs related to transformation initiatives and a $3 million impairment of an equity method investment.
Previous wording
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 wording
Restructuring expenses for the nine months ended October 3, 2026 were$43 million, an increase of $39 million compared to the same period in 2025. The increase was primarily driven by $24 million of employee termination costs related to ongoing transformation initiatives, $12 million of expense associated with debt modifications and extinguishment, and a $3 million impairment of an equity method investment.
Previous 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.
Current wording
We incurred no Indemnification Agreement expense for the three months ended October 3, 2026, consistent with the same period of 2025, reflecting the termination of the Indemnification Agreement with Honeywell on July 30, 2025.
Previous wording
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 wording
We incurred no Indemnification Agreement expense for the nine months ended October 3, 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.
Previous wording
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 wording
Other income, net for the nine months ended October 3, 2026 was $80 million, an increase of $103 million, compared to the same period in 2025. The increase was primarily attributable to a $77 million benefit recognized in the current year in connection with the settlement and termination of the Honeywell Tax Matters Agreement with Honeywell, a $23 million favorable impact of foreign exchange rates compared to the prior period, and a $4 million gain in the current year on the sale of certain assets.
Previous wording
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 wording
The effective income tax rate increased from (28.6)% to 18.4%, primarily driven by an increase in projected income before taxes for the year, partially offset by the elimination of the one-time non-deductible Indemnification Agreement expense, and the mix of earnings across the jurisdictions in which we operate.
Previous 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.
Current wording
The effective income tax rate increased from 2.9% to 34.1%, primarily driven by an increase in projected income before taxes for the year, partially offset by the elimination of the one-time non-deductible Indemnification Agreement expense, the mix of earnings across the jurisdictions in which we operate, and the derecognition of certain deferred tax assets related to the settlement of the Honeywell Tax Matters Agreement.
Previous 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.
Current wording
As of October 3, 2026, we had $229 million of cash and cash equivalents, of which 52% 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
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 wording
Upon consummation of the ADI Spin-Off on August 3, 2026, a one-time cash dividend of $900 million was made from ADIG to Resideo. Following the ADI Spin-Off, we have prioritized reducing outstanding indebtedness and strengthening our balance sheet. The proceeds received from ADIG were used to repay $518 million of senior secured term loans that were to mature in February 2028 and $382 million of senior secured term loans maturing in June 2031. On October 2, 2026, we made an additional repayment of $200 million of the senior secured term loans maturing in June 2031 following the completion of the post-closing cash adjustment contemplated by the separation and distribution agreement. Our debt repayments are expected to reduce future interest expense while preserving liquidity for our ongoing operating and capital requirements.
Previous 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.
Current wording
As of October 3, 2026, we were in compliance with all covenants related to the Second A&R Credit Agreement, Senior Notes due 2029, and Senior Notes due 2032.
Previous 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.
Current wording
Refer to Note 12. Long-Term Debt and Note 13. Fair Value 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 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.
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 nine months ended October 3, 2026, there were no common share repurchases. As of October 3, 2026, we had approximately $108 million of authorized repurchases remaining under the Share Repurchase Program.
Previous 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:
Current wording
Our continuing operations cash flows provided by or used in operating, investing, and financing activities for the nine months ended October 3, 2026 and September 27, 2025 are summarized as follows and discussed below:
Previous wording
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 wording
Net cash provided by operating activities for the nine months ended October 3, 2026 was $111 million, compared to cash used in operating activities of $1,456 million in the same period in 2025. The $1,567 million increase in cash provided by operating activities was primarily driven by an increase in net income of $905 million, non-cash adjustments of $115 million, and a $635 million net favorable change related to settlement of the Honeywell Tax Matters Agreement and the Indemnification Agreement. This was partially offset by an $84 million unfavorable change in working capital. The favorable change in non-cash adjustments related primarily to a $70 million increase in deferred income taxes related to the settlement of the Honeywell Tax Matters Agreement, and $39 million of higher restructuring expenses. The unfavorable change in working capital is primarily attributable to $93 million from accounts receivable related to increased sales and
Previous 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.
Current wording
Net cash used for investing activities for the nine months ended October 3, 2026 was $52 million, compared to $43 million of cash used in the same period in 2025. The $9 million greater use of cash in the current period was due to a $19 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 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.
Current wording
Net cash used for financing activities during the nine months ended October 3, 2026 was $285 million, compared to $1,167 million of cash provided by financing activities in the same period in 2025. The $1,452 million greater use of cash in the current year was driven by $1,198 million prior-year proceeds from new debt issuance, $1,106 million higher current-year debt repayments, $39 million cash used to acquire treasury stock in connection with stock award withholdings, and $20 million cash paid to ADI in the third quarter of 2026 in connection with the ADI Spin-off, partially offset by a $900 million one-time cash dividend received from ADI upon consummation of the ADI Spin-off.
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 July 4, 2026, we had operating lease payment obligations of $327 million, with $59 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 October 3, 2026, we had operating lease payment obligations of $85 million, with $21 million payable within 12 months.
Previous wording
Refer to Note 14. Commitments and Contingencies of the Notes to the Unaudited Condensed Consolidated Financial Statements for further discussion.
Current wording
Refer to Note 15. Commitments and Contingencies for further discussion.
Previous wording
Refer to Note 2. Summary of Significant Accounting Policies of the Notes to the Unaudited Condensed Consolidated Financial Statements for further discussion.
Current wording
Refer to Note 2. Summary of Significant Accounting Policies for further discussion.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
We anticipate slow growth in the U.S. residential housing market. In addition, we anticipate a continued slowdown with a large customer in the OEM security channel 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.
Current report — wording carried from elsewhere
Following the ADI Spin-Off, Resideo’s continuing operations consist of its former Products and Solutions segment. As a result, Resideo’s consolidated revenue, operating income, and cash flows have been 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, our net leverage ratio on a standalone basis is expected to be higher than the consolidated leverage ratio reported for prior periods.
Current report — wording carried from elsewhere
Interest expense, net for the three months ended October 3, 2026 was $31 million, an increase of $1 million, or 3.3%, compared to the same period in 2025. The increase was primarily driven by higher outstanding debt.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.