Resideo (REZI) FY Conference Summary Company Overview - Resideo was spun off from Honeywell in 2018, combining the ADI distribution business focused on commercial security and various residential home management lines of business [4][5] - The company has focused on integrating its operations and optimizing its manufacturing and distribution strategies since the spin-off [4][5] Financial Performance - Resideo reported strong performance in Q1 2025, with positive growth in both its business segments despite a volatile macroeconomic environment [6][7] - The company experienced weather-related impacts affecting store closures but noted strong customer demand for new products [6][7] Tariff and Macro Environment - Resideo's exposure to tariffs is minimal, with over 90% of products sold in the U.S. exempt from tariffs due to USMCA [10][11] - The company has a small amount of exposure from imports from China, but overall, the impact on costs is expected to be minor [11][14] - The macro environment is described as neutral to anemic, particularly affecting the residential market, but Resideo is gaining market share and maintaining good customer demand [17][18] Product and Solutions Segments - The majority of Resideo's products are in the residential market, primarily in North America, with key categories including air (thermostats), safety and security (First Alert brand), water controls, and energy products [22][25] - Organic growth in the Products and Solutions segment accelerated to 6% in the quarter, driven by customer demand and some pricing adjustments [29][30] New Product Development - Resideo is focusing on new product innovation to regain market share and introduce new products across various categories [36][37] - The company plans to launch multiple new products in the coming years, including a high-end thermostat to compete with Ecobee and Google Nest [37][38] ADI Segment Overview - ADI primarily serves North America with a strong e-commerce presence and has expanded into various verticals beyond commercial security [39][40] - Recent organic growth in ADI is attributed to a strong project pipeline and share gains, particularly in the commercial security sector [41][44] SnapOne Acquisition - The integration of SnapOne into ADI is progressing well, with a unified organization and strong synergy realization ahead of schedule [46][49][53] - The strategic rationale for the acquisition was to combine strengths in commercial and residential markets and enhance e-commerce capabilities [46][47] Capital Allocation and Financial Outlook - Resideo aims to maintain appropriate investments in the business while targeting a leverage ratio of 2x [76][77] - The company expects to generate significant cash flow, with a guidance of at least $375 million for the year [77] - Confidence in the 2025 revenue and profit outlook is based on consistent customer demand and project flow across both segments [64][66] Key Challenges and Opportunities - The Honeywell liability is seen as a potential concern for investors, but management believes it is becoming less material as the company grows [86][88] - The focus on growth and operational excellence is expected to drive performance and create synergistic opportunities between the Products and Solutions and ADI segments [90][91]

Resideo (REZI) FY Conference May 07, 2025 10:30 AM ET Speaker0 Okay. Thank you, everybody. Welcome to the Oppenheimer Industrial Conference. I am Ian Zaffino. I am the equity research analyst that covers Resideo. I've been covering them since they spun out of Honeywell. With me today is Tom Saran, the company's president of products and solutions, and also Mike Cartlett, is the company's CFO. Guys, thank you very much for being here today. We really appreciate it. Speaker1 Thanks, Ian. Thanks for having us. ...

Resideo (REZI) Q1 2025 Earnings Call May 06, 2025 05:00 PM ET Company Participants Christopher T. Lee - Global Head of Investor RelationsJay Geldmacher - President & CEOThomas Surran - President of Products & SolutionsRob Aarnes - President, ADI Global DistributionMichael Carlet - Executive VP & Chief Financial OfficerIan Zaffino - Managing Director Conference Call Participants Erik Woodring - AnalystNone - Analyst Operator Good afternoon. My name is Eric, and I will be your conference operator today. Thank ...

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]