RESIDEO TECHNOLOGIES, INC.

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 has impacted and will continue to 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 27% and 28% of segment income from operations, respectively, and 64% of Resideo’s consolidated revenue in each period. 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 have and will continue to, among other things, govern the provision of critical services between ADIG and Resideo.

Following the completion of the ADI Spin-Off, Resideo and ADIG depend on various transaction agreements that each company entered into, including a separation agreement, transition services agreement, employee matters agreement, a 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 example, 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.

Resideo depends on a number of significant customers including ADIG and a reduction in their purchases or a change in the terms of the commercial relationship could adversely affect Resideo’s results.

Resideo has a number of commercial relationships that account for a significant portion of Resideo's revenue and a reduction in purchases or a change in terms could adversely affect Resideo’s results. A limited number of customers, including retailers, distributors (including ADIG) and OEMs, account for a significant portion of Resideo’s revenue. Any significant reduction in, or loss of, sales to ADIG or Resideo’s other significant customers, or a material dispute in regard to the terms of the agreement, could adversely affect Resideo’s business, financial condition, results of operations and cash flows. Following the ADI Spin-Off, ADIG is an independent company and one of Resideo’s largest customers, purchasing Resideo’s products under a commercial products purchase agreement. ADIG is no longer under Resideo’s control and the parties buy and sell products on commercial party terms. The commercial products purchase agreement requires that the parties sell products to the customers in a manner to provide consistency following the ADI Spin-Off during the limited term, expiring two years following the ADI Spin-Off, and Resideo may be unable to renew or replace it on comparable terms. Resideo also has less visibility into, and influence over, end-customer demand in the distribution channel than it had before the ADI Spin-Off.

Resideo’s results of operations are subject to seasonal and extreme weather fluctuations, which may have a greater effect on its results following the ADI Spin-Off.

Demand for many of our products, including our comfort, combustion, water and safety products, is affected by heating and cooling seasons, the timing of HVAC replacement and new installation activity, and retail promotional periods. Unseasonable or extreme or moderate weather can reduce demand for our products, while seasonal inventory builds ahead of retail promotions and the heating season can increase our working capital needs. Before the ADI Spin-Off, the revenue of our distribution business helped moderate quarter-to-quarter variability in our consolidated results; as a smaller, less diversified company, we expect seasonality and extreme or moderate weather patterns to have a more pronounced effect on our quarterly revenue, margins and cash flows. As a result, our results for any interim period may not be indicative of results for a full year, and seasonal or weather-related variability could adversely affect our business, financial condition, results of operations and cash flows.

The memory components Resideo utilizes in its products are subject to supply shortages and price volatility.

Resideo relies on a limited number of third-party suppliers for printed circuit boards and memory components used in the products we manufacture. The highly concentrated memory chip market and intense AI data center demand, including a shift in global manufacturing capacity toward high-bandwidth memory for AI development, have resulted in significant price increases, and may result in additional price increases, for the memory specified in our products. Further, supplier manufacturing capacity constraints may impede our ability to secure necessary components on a timely basis, materially impacting our production schedules.

Resideo may realize transportation and freight cost inflation and disruptions as a result of recent geopolitical tension.

Geopolitical and economic tensions are causing disruptions in global supply chains, increased costs and overall volatility. The conflicts in the Middle East have disrupted energy supplies, increasing the costs for energy. Resideo relies on international ocean freight, regional trucking, and air cargo networks to transport both raw materials to our facilities and finished goods to markets. Carrier capacity constraints, port closures, labor strikes, physical threats to shipping lanes, driver shortages, and volatile bunker fuel pricing have, and may continue to, dramatically increase our outbound and inbound transportation costs. If we are unable to pass on the escalating logistics costs to our customers, our operating profitability may decline.