Core Viewpoint - Resideo Technologies reported strong quarterly earnings, significantly exceeding expectations, which may influence future stock performance and investor sentiment [1][2][3]. Financial Performance - The company achieved earnings of $0.63 per share, surpassing the Zacks Consensus Estimate of $0.30 per share, and up from $0.47 per share a year ago, representing an earnings surprise of 110% [1]. - Resideo posted revenues of $1.77 billion for the quarter, exceeding the Zacks Consensus Estimate by 2.44%, and up from $1.49 billion year-over-year [2]. - Over the last four quarters, Resideo has surpassed consensus EPS estimates three times and topped revenue estimates four times [2]. Stock Performance and Outlook - Resideo shares have declined approximately 23.6% since the beginning of the year, compared to a 3.9% decline in the S&P 500 [3]. - The company's current consensus EPS estimate for the upcoming quarter is $0.53 on revenues of $1.77 billion, and for the current fiscal year, it is $2.01 on revenues of $7.35 billion [7]. Industry Context - The Security and Safety Services industry, to which Resideo belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, indicating potential challenges ahead [8]. - The performance of Resideo's stock may be influenced by the overall outlook for the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8].

Financial Data and Key Metrics Changes - Total net revenue for the first quarter was approximately $1,800,000,000, representing a 19% year-over-year growth [5] - Total gross margin increased to 28.9%, up 200 basis points year-over-year [5][28] - Adjusted EBITDA grew 23% year-over-year to $168,000,000 [6][28] - Adjusted earnings per share rose 34% year-over-year to $0.63 [6][28] Business Segment Data and Key Metrics Changes - Products and Solutions segment achieved 6% organic revenue growth year-over-year, with total revenue growth of 5% [6][13] - ADI segment reported 29% year-over-year growth in reported net revenue, with 4% organic net revenue growth despite two fewer selling days [21][27] - Gross margin for Products and Solutions was 41.4%, up 190 basis points year-over-year [17] - ADI gross margin was 21.6%, up 360 basis points year-over-year [25] Market Data and Key Metrics Changes - Customer demand remained healthy across both business segments, with minimal signs of hesitancy or order cancellations [11][12] - Organic e-commerce net revenue for ADI grew 15% year-over-year, achieving a new record in daily sales average [23] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through price increases and strategic inventory purchases [10][11] - Continued emphasis on new product introductions, with several launches planned for 2025 [19][20] - The integration of SnapOne is progressing well, with nearly 100 new products launched in the quarter [24] Management's Comments on Operating Environment and Future Outlook - Management maintains a cautious outlook on the macroeconomic environment but believes in the strength of their execution to navigate uncertainties [30][33] - The company reaffirms its 2025 full-year outlook, planning phased price increases to offset tariff costs [33] Other Important Information - The company absorbed an immaterial amount of tariff-related expenses prior to the implementation of USMCA tariff preference treatment [17] - The company is actively monitoring customer behavior and market conditions to adapt its strategies accordingly [11][12] Q&A Session Summary Question: Pricing in ADI and demand sensitivity - Management indicated that they are passing through price increases from suppliers and do not expect material demand changes due to these increases [38][43] Question: Customer buying behavior in April - Management noted minimal buying ahead and strong demand in March and April, with no significant changes in customer behavior [50][56] Question: Overall spending cycle in residential and commercial markets - Management described the current housing market as somewhat depressed but noted healthy remodeling activity and increasing content per new home [59][62]

Financial Data and Key Metrics Changes - Total net revenue for Q1 2025 was approximately $1,800,000,000, representing a 19% year-over-year growth [5] - Total gross margin increased to 28.9%, up 200 basis points year-over-year [6] - Adjusted EBITDA grew 23% year-over-year to $168,000,000 [6] - Adjusted earnings per share rose 34% year-over-year to $0.63 [6] Business Segment Data and Key Metrics Changes - Products and Solutions segment achieved 6% organic revenue growth year-over-year, with total revenue growth of 5% [14] - ADI segment reported 29% year-over-year growth in reported net revenue, with 4% organic net revenue growth despite two fewer selling days [22] - ADI's organic average daily sales grew 7% year-over-year [22] Market Data and Key Metrics Changes - Demand for new Honeywell Home Focus Pro thermostats and First Alert Vista H series security products remains strong [6] - Customer demand in Q1 was healthy across both business segments, with minimal signs of customer hesitancy or order cancellations [11] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through price increases and strategic inventory purchases [10][11] - Continued emphasis on new product introductions, with several scheduled for launch later in 2025 [20] - The integration of SnapOne is progressing well, with nearly 100 new products launched in the quarter [25][26] Management's Comments on Operating Environment and Future Outlook - Management maintains a cautious outlook on the macroeconomic environment but believes in the strength of execution to navigate uncertainties [32] - The company is reaffirming its 2025 full-year outlook, planning phased price increases to offset tariff costs [34][36] - Management expressed optimism about ongoing gross margin improvements driven by structural efficiencies and new product launches [70][71] Other Important Information - Approximately 90% of goods sold in the U.S. are produced in Mexico, with 98% being USMCA compliant and exempt from tariffs [9][18] - The company absorbed an immaterial amount of tariff-related expenses prior to USMCA tariff preference treatment [18] Q&A Session Summary Question: Pricing strategy in ADI and potential demand impact - Management indicated that they have taken a phased approach to pass through price increases from suppliers and do not expect material demand changes [40][42] Question: Customer buying behavior and demand in April - Management noted minimal buying ahead and strong demand continued into April, with no significant changes in customer behavior [56][58] Question: Overall spending cycle in residential and commercial markets - Management described the current housing market as somewhat depressed but noted healthy remodeling activity and recovery in new home sales [61][64] Question: Gross margin leverage when the macro environment improves - Management expressed optimism about structural improvements in gross margins, expecting ongoing growth without setting specific targets [70][71]

Q1 2025 Financial Performance - Net revenue reached $1.77 billion, a 19% year-over-year increase[12, 14] - Adjusted EBITDA was $168 million, up 23% year-over-year[12, 14] - Adjusted EPS increased to $0.63, a 34% year-over-year rise[12, 14] - Cash used by operating activities was $65 million, primarily due to increased accounts receivable and early payments to suppliers[13] Segment Performance - Products & Solutions (P&S) revenue grew by 5% year-over-year to $649 million[14, 16] - P&S Adjusted EBITDA increased by 13% year-over-year to $158 million[14, 16] - ADI Global Distribution revenue increased by 29% year-over-year to $1.121 billion[14, 16] - ADI Adjusted EBITDA increased by 24% year-over-year to $72 million[14, 16] Financial Outlook for 2025 - The company projects total net revenue between $7.285 billion and $7.485 billion for 2025[27] - Adjusted EBITDA is expected to be in the range of $725 million to $805 million for 2025[27]

[Resideo First Quarter 2025 Financial Results](index=1&type=section&id=Resideo%20First%20Quarter%202025%20Financial%20Results) [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) Resideo reported strong Q1 2025 results, exceeding its outlook with a 19% year-over-year increase in net revenue to $1.77 billion, driven by organic growth in both segments and the Snap One acquisition. Gross margin expanded by 200 basis points to 28.9%, and Adjusted EBITDA grew 23% to $168 million. Adjusted EPS of $0.63 significantly surpassed the high-end of the company's guidance Key Financial Highlights | Financial Metric | Q1 2025 | Q1 2024 | % Change | Note | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $1.77 billion | $1.49 billion | 19% | High-end of outlook range | | Gross Margin | 28.9% | 26.9% | +200 bps | Eighth consecutive quarter of YoY improvement for Products and Solutions | | Net Income | $6 million | $43 million | -86% | Primarily due to a $47 million increase in Honeywell Reimbursement Agreement expense | | Adjusted EBITDA | $168 million | $137 million | 23% | High-end of outlook range | | Diluted EPS | $(0.02) | $0.29 | - | - | | Adjusted EPS | $0.63 | $0.47 | 34% | Exceeded high-end of outlook range | - The integration of Snap One into the ADI segment is progressing well, with synergy achievement reported to be ahead of plan[6](index=6&type=chunk) - The company stated that over **98%** of product costs incurred by the Products and Solutions segment in Mexico are currently exempt from tariffs[6](index=6&type=chunk) [Management Remarks](index=1&type=section&id=Management%20Remarks) CEO Jay Geldmacher highlighted the strong Q1 performance, with results at or above the high end of guidance. He noted excellent operational execution, organic growth in both segments, and continued margin expansion. The company reaffirmed its 2025 outlook, expressing confidence in profitable growth opportunities despite a volatile macro environment and its ability to mitigate potential tariff impacts - Management reported a strong first quarter with results at or above the high-end of the range for all key financial metrics[3](index=3&type=chunk) - Both the ADI and Products and Solutions segments generated organic net revenue growth, continued gross margin expansion, and healthy Adjusted EBITDA growth[3](index=3&type=chunk) - The company reaffirmed its 2025 outlook, citing profitable growth opportunities and the belief that it can essentially mitigate the cost impact of any tariffs[3](index=3&type=chunk)[4](index=4&type=chunk)[5](index=5&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) Both of Resideo's segments demonstrated growth. Products and Solutions saw net revenue increase by 5% to $649 million, with a notable gross margin expansion to 41.4%. ADI Global Distribution's revenue grew 29% to $1,121 million, primarily driven by the Snap One acquisition, and achieved 4% organic growth [Products and Solutions](index=1&type=section&id=Products%20and%20Solutions%20First%20Quarter%202025%20Highlights) The Products and Solutions segment achieved a 5% increase in net revenue to $649 million, with gross margin expanding to 41.4% and Adjusted EBITDA growing 13% to $158 million, driven by volume, mix, and price realization Products and Solutions Segment Performance | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | $649 million | $620 million | 5% | | Gross Margin | 41.4% | 39.5% | +190 bps | | Income from Operations | $136 million | $112 million | 21% | | Adjusted EBITDA | $158 million | $140 million | 13% | | Adjusted EBITDA Margin | 24.3% | 22.6% | +170 bps | - Revenue growth was driven by volume demand, mix, and price realization, particularly in the HVAC and Electrical Distribution channels for the new Honeywell Home FocusPRO thermostat and BRK products[7](index=7&type=chunk) - Gross margin expansion was attributed to structural improvements that increased operational efficiency[9](index=9&type=chunk) - The company launched the connected First Alert Smart Smoke and Carbon Monoxide Alarm, designed to be compatible with the Google Home app and replace Google's expiring Nest Protect alarms[8](index=8&type=chunk) [ADI Global Distribution](index=2&type=section&id=ADI%20Global%20Distribution%20First%20Quarter%202025%20Highlights) The ADI Global Distribution segment reported a 29% increase in net revenue to $1,121 million, primarily due to the Snap One acquisition, with organic growth of 4% and a 360 basis point gross margin expansion ADI Global Distribution Segment Performance | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | $1,121 million | $866 million | 29% | | Gross Margin | 21.6% | 18.0% | +360 bps | | Income from Operations | $34 million | $49 million | -31% | | Adjusted EBITDA | $72 million | $58 million | 24% | - Revenue growth was primarily driven by the **$227 million** contribution from the Snap One acquisition. Organic revenue growth was **4%**[11](index=11&type=chunk) - Organic growth was strong in the e-commerce channel, which grew **15%** year-over-year. Organic average daily sales grew **7%**[11](index=11&type=chunk) - The **360 basis point** increase in gross margin was driven by the inclusion of higher-margin Snap One and increased e-commerce sales[12](index=12&type=chunk) [Cash Flow and Liquidity](index=2&type=section&id=Cash%20Flow%20and%20Liquidity) The company used $65 million in cash from operating activities in Q1 2025, a notable shift from the $2 million provided in Q1 2024. This change was primarily driven by an increase in accounts receivable due to higher sales and cash outflows for accounts payable. As of March 29, 2025, Resideo held $577 million in cash and cash equivalents and had total outstanding gross debt of $2.02 billion - Net cash used by operating activities was **$65 million** in Q1 2025, compared to **$2 million** of cash provided by operating activities in Q1 2024[13](index=13&type=chunk) - The use of cash was primarily driven by an increase in accounts receivable from higher sales and early payments on accounts payable to receive supplier discounts[13](index=13&type=chunk) Liquidity Position | Liquidity Position | As of March 29, 2025 | | :--- | :--- | | Cash and cash equivalents | $577 million | | Total outstanding gross debt | $2.02 billion | [2025 Outlook](index=3&type=section&id=Outlook) Resideo reaffirmed its full-year 2025 outlook and provided guidance for the second quarter of 2025. For Q2, the company expects net revenue between $1,805 million and $1,855 million and Adjusted EPS of $0.51 to $0.61. For the full year, net revenue is projected to be between $7,285 million and $7,485 million, with Adjusted EPS of $2.23 to $2.47 2025 Financial Outlook | ($ in millions, except per share data) | Q2 2025 Outlook | Full Year 2025 Outlook | | :--- | :--- | :--- | | Net revenue | $1,805 - $1,855 | $7,285 - $7,485 | | Non-GAAP Adjusted EBITDA | $175 - $195 | $725 - $805 | | Non-GAAP Adjusted Earnings Per Share | $0.51 - $0.61 | $2.23 - $2.47 | | Cash Provided by Operations | - | $345 - $405 | [Financial Tables and Reconciliations](index=5&type=section&id=Financial%20Tables%20and%20Reconciliations) [Summary of Financial Results (Table 1)](index=5&type=section&id=Table%201:%20SUMMARY%20OF%20FINANCIAL%20RESULTS%20(UNAUDITED)) Table 1 presents a detailed breakdown of financial results by segment (Products and Solutions, ADI Global Distribution) and for the total company for Q1 2025 compared to Q1 2024. It details net revenue, cost of goods sold, gross profit, and income from operations for each segment, highlighting ADI's 29% revenue growth and Products and Solutions' 21% growth in operating income - Provides a side-by-side comparison of Q1 2025 and Q1 2024 performance for each business segment and corporate expenses, showing revenue, costs, and operating income[23](index=23&type=chunk) [Consolidated Statements of Operations (Table 2)](index=6&type=section&id=Table%202:%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20(UNAUDITED)) The Consolidated Statement of Operations shows a 19% increase in net revenue to $1.77 billion. However, net income decreased significantly from $43 million in Q1 2024 to $6 million in Q1 2025. This was primarily due to a $47 million year-over-year increase in the non-cash expense related to the Honeywell Reimbursement Agreement, which rose from $43 million to $90 million - Net income fell to **$6 million** from **$43 million** year-over-year, largely due to a significant increase in the Reimbursement Agreement expense to **$90 million**[24](index=24&type=chunk) - Diluted earnings per share (EPS) was **$(0.02)**, a sharp decline from **$0.29** in the prior-year quarter[24](index=24&type=chunk) [Consolidated Balance Sheets (Table 3)](index=7&type=section&id=Table%203:%20CONSOLIDATED%20BALANCE%20SHEETS%20(UNAUDITED)) The balance sheet as of March 29, 2025, shows total assets of $8.07 billion and total liabilities of $4.73 billion, resulting in total stockholders' equity of $3.35 billion. Key assets include $3.08 billion in goodwill and $1.23 billion in inventories. Long-term debt stood at $1.98 billion Consolidated Balance Sheet Summary | Balance Sheet Item | March 29, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $8,074 million | $8,199 million | | Total Liabilities | $4,727 million | $4,890 million | | Total Stockholders' Equity | $3,347 million | $3,309 million | [Consolidated Statements of Cash Flows (Table 4)](index=8&type=section&id=Table%204:%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20(UNAUDITED)) The cash flow statement for Q1 2025 reveals a net cash usage of $65 million from operating activities, a significant decrease from the $2 million provided in Q1 2024. Net cash used in investing activities was $31 million, primarily for capital expenditures, and financing activities used $22 million. This resulted in a net decrease in cash of $115 million for the quarter Consolidated Cash Flow Summary | Cash Flow Item (Three Months Ended) | March 29, 2025 | March 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(65) million | $2 million | | Net cash used in investing activities | $(31) million | $(22) million | | Net cash used in financing activities | $(22) million | $(8) million | | Net decrease in cash | $(115) million | $(33) million | [Non-GAAP Reconciliations](index=9&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES%20AND%20RECONCILIATIONS) This section provides detailed reconciliations of GAAP measures to non-GAAP measures, including Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA. For Q1 2025, GAAP Net Income of $6 million was adjusted to a non-GAAP Adjusted Net Income of $94 million. Key adjustments included adding back the $55 million non-cash portion of the Reimbursement Agreement accrual, $30 million in intangible asset amortization, and $15 million in stock-based compensation. Consequently, GAAP EPS of $(0.02) was adjusted to $0.63 - Reconciles GAAP Net Income of **$6 million** to Non-GAAP Adjusted Net Income of **$94 million** for Q1 2025. Major adjustments include the non-cash Reimbursement Agreement accrual (**$55 million**), intangible asset amortization (**$30 million**), and stock-based compensation (**$15 million**)[28](index=28&type=chunk) - Reconciles GAAP Net Income of **$6 million** to Non-GAAP Adjusted EBITDA of **$168 million** for Q1 2025[30](index=30&type=chunk) - Provides segment-level reconciliations from GAAP Income from Operations to Non-GAAP Adjusted EBITDA for both Products and Solutions (**$158 million**) and ADI Global Distribution (**$72 million**)[32](index=32&type=chunk)[34](index=34&type=chunk)

Core Insights - Resideo Technologies, Inc. reported strong financial results for Q1 2025, with net revenue of $1.77 billion, reflecting a 19% year-over-year increase, and exceeding the high-end of the outlook range [2][7][8] - The company reaffirmed its 2025 outlook, indicating confidence in continued growth across its business segments despite macroeconomic volatility [3][4] Financial Performance - Net revenue for the first quarter was $1.77 billion, up from $1.49 billion in Q1 2024, marking a 19% increase [8][27] - Gross margin improved to 28.9%, a 200 basis point increase year-over-year, with Products and Solutions achieving a gross margin of 41.4%, marking the eighth consecutive quarter of improvement [7][12] - Adjusted EBITDA reached $168 million, a 23% increase from $137 million in Q1 2024, representing a margin of 9.5% [8][35] Segment Performance - Products and Solutions segment generated net revenue of $649 million, up 5% year-over-year, driven by strong demand in HVAC and Electrical Distribution channels [10][12] - ADI Global Distribution segment reported net revenue of $1,121 million, a 29% increase compared to Q1 2024, with organic growth of 4% when excluding the Snap One acquisition [14][18] Cash Flow and Liquidity - The company reported cash used by operating activities of $65 million in Q1 2025, compared to $2 million of cash provided in the same period last year, primarily due to increased accounts receivable [16][27] - As of March 29, 2025, Resideo had cash and cash equivalents of $577 million and total outstanding gross debt of $2.02 billion [16][30] Outlook - For Q2 2025, Resideo anticipates net revenue between $1.805 billion and $1.855 billion, and for the full year 2025, net revenue is projected to be between $7.285 billion and $7.485 billion [17][19]

Company Overview - Resideo Technologies, Inc. (REZI) shares increased by 10.3% to close at $16.20, following a notable trading volume that exceeded typical levels. This comes after a 17.3% decline over the previous four weeks [1][2]. Market Impact - The rally in Resideo's shares was influenced by President Trump's announcement of a 90-day pause on tariffs for several countries, aimed at mitigating market sell-offs and concerns over potential recession due to higher tariffs [2]. Earnings Expectations - Resideo is projected to report quarterly earnings of $0.38 per share, reflecting a year-over-year decrease of 19.2%. Revenue is anticipated to reach $1.74 billion, marking a 16.9% increase from the same quarter last year [3]. Earnings Estimate Trends - The consensus EPS estimate for Resideo has remained unchanged over the past 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions. Monitoring REZI's performance is advised to determine if the recent price increase can lead to further strength [4]. Industry Context - Resideo operates within the Zacks Security and Safety Services industry, where another company, MSA Safety, also experienced a price increase of 8.1% to $143.57, despite a 12.9% decline over the past month. MSA Safety's EPS estimate has remained stable at $1.59, showing a year-over-year change of -1.2% [4][5].

Investors in Resideo Technologies, Inc. (REZI) need to pay close attention to the stock based on moves in the options market lately. That is because the May 16, 2025 $12.50 Call had some of the highest implied volatility of all equity options today. What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It ...

New First Alert Smart Smoke & CO Alarm compatible with Google Home ecosystem and designed for seamless integration with Nest Protect Smart Smoke & CO AlarmSCOTTSDALE, Ariz., March 28, 2025  /PRNewswire/ -- First Alert, America's most trusted fire-safety brand* owned by Resideo (NYSE: REZI), and Google Home, a technology leader in the smart home, today announced a new life-safety collaboration. The new First Alert® Smart Smoke & Carbon Monoxide (CO) Alarm is compatible with the Nest Protect Smart Smoke & CO ...

Group 1 - The article discusses Resideo Technologies (NYSE: REZI) and highlights the less than encouraging indicators surrounding the housing market affecting the company [1] - The author has over 14 years of experience in stock analysis, focusing on both long and short positions, and has been covering the energy sector for 7 years, particularly the oilfield equipment services sector [1] - The author also covers the Industrial Supply industry and occasionally collaborates with other contributors [1]