REZI

Image source: The Motley Fool. Wednesday, Aug. 12, 2026, at 5 p.m. ET Global Head of Strategic Finance-Christopher Lee Chief Executive Officer-Thomas Surran Operator: Hello, everyone. Thank you for joining us, and welcome to the Resideo Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Chris Lee, Global Head of Strategic Finance. Please go ahead. Christopher Lee: Thank you, and good afternoon, everyone. Thank you for joining us for Resideo's second quarter 2026 earnings call. Joining me on today's call is Tom Surran, Resideo's Chief Executive Officer. We would like to remind you that this afternoon's call contains forward-looking statements. Statements other than historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Resideo's filings with the Securities and Exchange Commission. The company assumes no obligation to update any such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our annual report on Form 10-K and other SEC filings. In addition, we will discuss non-GAAP financial measures on today's call. These non-GAAP financial measures, which can sometimes be identified by the use of adjusted and the description of the measure should be considered in addition to, not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP financial measures is included in the financial data workbook, which is accessible on the Investor Relations page of our website at investor.resideo.com. Unless stated otherwise, all numbers and results discussed on today's call other than revenue are on a non-GAAP basis. With that, I will turn the call over to Tom. Thomas Surran: Thank you, Chris, and thanks to everyone for joining us today. Before I speak about the quarter, the entire team would like to thank Jay Geldmacher for his service as CEO over the last 6 years. During his tenure, Jay applied his operational and technical expertise to help Resideo to get where we are today, both strategically and operationally. Jay led us through 2 major acquisitions, the recent spin and provided a steady hand through a dynamic market condition. Jay's interactions with customers, partners and employees have created a tremendous company culture and strong enduring relationships and will benefit Resideo for a long time. Also earlier today, we announced Shane Harrison as Resideo's next CFO. I had the opportunity to work with Shane during our time together at FLIR. So I know firsthand the kind of leaders we are bringing into Resideo. Shane is highly capable, dedicated and execution-oriented. He consistently took on challenging assignments, delivered exceptional results and was a major contributor to FLIR's success. He combines strong financial and strategic capabilities with sound judgment, a willingness to dig into details and a focus on getting things done. I also know him to be a person of high integrity and someone who works extremely well with others. Shane will be joining us on September 1. As you are aware, we completed the ADI Global Distribution spin-off on August 3. As in prior releases, our discussion of the second quarter results, however, will be at times on a consolidated basis, as the Products & Solutions and ADI business segments, both operated under Resideo in the second fiscal quarter of 2026. As usual, we will also discuss the results of each segment on a segmented accounting basis. As has been the case in the past, these segmented results do not include a full allocation of corporate costs borne by the business as a whole. Finally, there is also information in our earnings material that refers to Resideo's stand-alone results, which are presented as if the ADI spin-off was completed on January 1, 2026, and include adjustments to certain financial line items to reflect management's estimates of what our results would have been. We have provided a bridge from P&S segmented results to Resideo's stand-alone results in our earnings release. Starting with our third quarter financial statements. We will classify ADI as discontinued operations for that quarter and all prior periods. I will discuss Resideo's consolidated second quarter results before I hand the call over to Chris to speak about the balance sheet, cash flow and ADI. Chris will then hand the call back to me to speak about the Products & Solutions segment results and Resideo's 2026 stand-alone outlook. In the second quarter, we were pleased with the continued execution demonstrated by the entire team as we exceeded the high end of the second quarter outlook ranges for all metrics, both the consolidated and business segment level. Total revenue grew 2% year-over-year to just under $2 billion, a new quarterly record. Total adjusted EBITDA grew 19% year-over-year to $249 million, another new quarterly record. Adjusted EBITDA includes the favorable impact of $27 million of tariff refunds during the quarter, primarily received by ADI. Total adjusted earnings per share grew 26% year-over-year to $0.83. Overall, we are pleased with both the top and bottom line performance for Resideo in the second quarter. Now let me hand the call over to Chris to discuss the balance sheet, cash flow and ADI. Christopher Lee: Thanks, Tom. Total reported cash provided by operating activities in the second quarter was $148 million versus the $200 million generated in the same period last year. The year-over-year decrease was driven primarily by approximately $45 million in payments for nonrecurring business separation activities and settlements including the termination of the Honeywell Tax Matters Agreement. There was also a $20 million use of cash for higher cash interest paid. The decrease was partially offset by higher net income and less cash taxes paid. Consistent with our Investor Day messaging, Resideo started deleveraging on August 3, paying down $900 million of outstanding principal under the Term Loan B credit facility. We expect to make an additional repayment of approximately $200 million on the Term Loan B credit facility in the third quarter following completion of the post-closing cash adjustment under the separation agreement with ADI. With respect to the ADI segment, we have provided its second quarter segment results in our press release. ADI has announced that it will be hosting its second quarter earnings call tomorrow morning, and we'll speak about its results and outlook in more detail on its earnings call. ADIG will present its results derived from Resideo's accounting records and presented on a carve-out accounting basis. On behalf of the entire Resideo management team, we would like to congratulate Rob and the ADI team on the completion of the spin and their new life as a stand-alone public company. They will remain an important partner to Resideo. Let me hand the call back over to Tom to discuss the Products & Solutions segment results and Resideo's 2026 outlook on a stand-alone basis. Thomas Surran: Thanks, Chris. The Products & Solutions segment continued its strong operational execution despite soft housing trends and inflationary input costs. The team achieved another quarter of year-over-year revenue growth and the 13th consecutive quarter of year-over-year gross margin expansion. Products & Solutions reported revenue growth of 4% year-over-year, including an approximate 35 basis point favorable impact from currency. Revenue grew across substantially all of our sales channels and product families, driven primarily by volume from customer demand. Let me walk through our performance by primary sales channel. First, in the retail channel, we experienced another quarter of strong year-over-year revenue growth driven primarily by increased volumes for higher-value products. Adoption of our combination smoke and CO detectors, and our new thermostats continues to be strong and ahead of our expectations. Our point of sales volumes at our key accounts continues to be strong and is supported by healthy levels of channel inventory. In the OEM combustion channel also reported as energy category posted its seventh consecutive quarter of year -- for our year-over-year revenue growth against a tough comparison. Growth was driven primarily by continued demand for higher-priced products, primarily in EMEA. In the HVAC distribution channel, revenue returned to year-over-year growth. Revenue growth was driven primarily by volume led by another quarter of strong customer adoption of the Honeywell Home Elite Pro, our new premium smart thermostat. Demand continues to exceed our expectations and has resulted in our increased presence in the high-end connected segment of the market. In addition, our new dehumidification and water filtration products increase our category penetration and continue the positive momentum generated from the execution of our strategy. Conditions in the residential HVAC market remained stable versus last quarter. Our channel inventory remained healthy and increased modestly from the prior quarter. The electrical distribution channel had another quarter of year-over-year revenue growth driven primarily by volume. We saw continued demand for our BRK branded nonconnected safety products primarily in the maintenance, repair and operations market, but also the manufactured housing market. Our content per new residential built home remained stable quarter-over-quarter amid a continued soft market for new home builds. Revenue from the security distribution channel was flat year-over-year given the continued soft market for security installs related to the resale of existing homes. OEM security sales were down slightly year-over-year due to reduced volumes with a large OEM security customer. This was in line with our expectations for the quarter and with our strategy to focus on higher-margin branded business. Moving on to profitability. Our gross margin percentage was 43.6%, up 70 basis points year-over-year and up 100 basis points sequentially. Gross margin expansion was driven by volume increases, favorable manufacturing and supply chain variances and tariff refunds, partially offset by product sales mix. We also incurred inflationary input costs, which we do not believe are permanent but are only partially offset by the price actions we announced last quarter. P&S segmented adjusted EBITDA grew 6% year-over-year due primarily to higher gross profit dollars. As discussed at our recent Investor Day, R&D continues to be approximately 5% of total segmented revenue as we invest behind new product launches and speed to market. Operating expenses increased due primarily to higher legal settlement costs. Before I provide our full year 2026 and third quarter financial outlook for stand-alone Resideo, let me walk you through some of our current market perspectives and assumptions. First, we believe Resideo can continue with steady execution through a residential macroeconomic environment that is persistently soft. We also anticipate continued demand for our products and year-over-year revenue growth across all channels other than OEM security during the second half of 2026. We anticipate some continued weakness in the OEM security channel. Our current outlook reflects lower volumes from a large OEM security customer which we expect will result in $40 million to $50 million less revenue in the second half of 2026 versus the same period in the prior year. Input costs such as memory, metals, printed circuit boards, semiconductors and shipping continue to increase at a pace greater than originally expected due to dynamic global conditions. While we proactively instituted price increases during the second quarter, our outlook incorporates a slight headwind to gross margin due to higher input costs anticipated in the second half of the year compared to the most recent quarter. We do not anticipate material cost increases related to tariffs after conducting our assessment on the recent trade actions announced by the U.S. administration on July 24. We also do not anticipate receiving any material tariff refunds for the remainder of 2026. Due to our corporate accounting calendar, there is one extra day in the third quarter of 2026 and 4 fewer days in the fourth quarter of 2026, both versus the same period last year. Now as to our outlook. We are initiating our outlook for Resideo on a stand-alone basis. Starting in the third quarter of 2026, Resideo will no longer consolidate its former ADI Global Distribution segment and results for that segment for all periods prior to the ADI spin-off date will be reflected as discontinued operations. Our outlook is presented as if we had operated as a stand-alone company for the first half of '26, coupled with our stand-alone outlook for the remainder of the year. This outlook includes sales to ADI as an external customer and approximately $80 million of full year corporate costs allocated to stand-alone Resideo. The full year of sales to ADI are anticipated to be approximately $175 million. In our earnings press release, earnings presentation and financial data workbook all of which can be found on our website, we have included a revenue and EBITDA bridge from reported segment results to a stand-alone basis. During this short transition period, the stand-alone outlook we are providing is for revenue and adjusted EBITDA only. We intend to provide our outlook for adjusted earnings per share and cash from operations upon completion of certain activity including the post-closing cash adjustment under the separation agreement with ADI that is to be calculated in the coming weeks. We intend to once again provide outlook on these metrics starting with our third quarter earnings call. With that, our stand-alone outlook for 2026 is as follows: revenue in the range of $2.9 billion to $2.95 billion; adjusted EBITDA in the range of $605 million to $625 million. And our stand-alone outlook for the third quarter of 2026 is as follows: revenue in the range of $705 million to $730 million. And adjusted EBITDA in the range of $145 million to $155 million. Looking forward, I'd like to reiterate some of our key themes from our recent Investor Day. The new Resideo was focused on its mission as a pure-play building technologies company. We believe we have tremendous market momentum from the recent introduction of new differentiated products that strengthen our customer value proposition and in turn, will fuel the near- and medium-term financial targets we laid out today and at our Investor Day. Those targets reflect a business with higher gross and operating margins than the historical Resideo, coupled with continued strong cash flow generation. We're very excited about the launch of new products in the second half of 2026, including our new smoke and CO detector platform and our new video surveillance and intrusion security products, to name a few. And as we discussed at length during our Investor Day, we have several levers we are pulling that are intended to strategically optimize our operations throughout the remainder of this year and beyond. With our track record of execution, our stellar team and our focused go-forward strategy, I am extremely confident in our profitable growth path ahead. Now let's open the call for questions. Operator? Operator: [Operator Instructions] The first question comes from the line of Erik Woodring with Morgan Stanley. Erik Woodring: And congrats again on the spin. Tom, I just want to make sure we're doing kind of a like-for-like comparison here. So if I go back to last quarter, the guide for Resideo Holdco 2026 revenue growth was 5% year-over-year at the midpoint. There were remarks that P&S and ADI revenue would grow at roughly the same rates, again, call it, around 5% year-over-year. I think if I take your new stand-alone P&S revenue guidance of $2.925 billion at the midpoint and compare it to stand-alone revs in 2025, we're now getting to P&S revenue growth of 2% year-over-year in 2026. So first, can you just comment, is that math correct? And then if so, why are we guiding down relative to 90 days ago after just beating the second quarter, kind of what is changing about the second half? And then a quick follow-up, please. Thomas Surran: Okay. So the math is a little bit off. So I'd have to go through exactly how you did your calculations. But no, the assumption what we said was that the things with the 2 segments would have similar growth for the year. We did not specify that it was P&S coming up in its revenue growth versus ADI coming down. But the projection that we have for P&S, A, the growth is higher than the number of 2% that you've stated. So overall for the year, it's almost 3%. Now in terms of how -- if you want to talk about exactly your math, we can go through that. But generally, that's in line with what our expectations have been. Now in the second half of the year, we do have the issues that we described about OEM security, which were something that came about in the mid part of the year. It's a business we've talked about before. It's one that's determined by a third party and so we have to respond to that. Christopher Lee: Erik, it's Chris. One other thing I'd like to add is if you look at the first half performance for Products & Solutions at the segment level, we outperformed our expectations given growth across most channels. And we still anticipate growth in the second half of the year across many of our channels with the exception of the OEM security channel like Tom just mentioned. Erik Woodring: Okay. All right. We can do the math offline, but I appreciate all that color, guys. And then just a quick follow-up, Tom or Chris. Just can you maybe help us better understand how to think about the linearity of gross margins over kind of the next 6 months or 2 quarters? Just -- there's a number of moving pieces when we think about seasonality, input cost inflation, pricing, mix, end market softness, NPI, just any way that you can help us understand how to think about that kind of trajectory would be super helpful. Thomas Surran: Yes. So I think in terms of -- because of the input costs that we've talked about, the biggest challenge for us is Q3. So we said -- always said it was never going to be linear, and it's going to be step functions. And I think Q3, we're going to see probably that most of these temporary input costs going up before all of the pricing catches up to it. So it's probably going to hit us most in Q3. But we're not talking net here. I mean most of this is going to be recovered by pricing, but there will be some. I'm not sure that we will get gross profit for a 14th consecutive quarter, it's well within the possibility, but it's not something we're focused on right now just because of those activities. Christopher Lee: And one other thing to mention, Erik, remember last quarter when we talked about the price increase that we were implementing in Q2, we did implement that price increase, but we also said it would have a lag impact because of certain customer provisions that we have with certain customers in terms of a notice period. So while we have increased pricing and as Tom said, the price increase is helping to offset some of the inflationary costs. It's not a dollar for dollar offset. Erik Woodring: Okay. Awesome. I really appreciate the color. Operator: The next question comes from the line of Dan Stratemeier with Jefferies. Dan Stratemeier: Congratulations again, Tom, congratulations on your first call as CEO. Let me follow up on Erik's question and ask it a little bit differently, but maybe tie it back in. Tom, can you help us understand the cadence and sort of the number -- actually not the exact number, but looking at your NPIs that are going to be coming out over the next 18 months, it's obviously being a big part of your growth, your gross margin expansion. How would you compare what you have upcoming over the next 12, 18 months to what you rolled out over the last 18 months and maybe like the magnitude of what's coming versus what already came out. And then to Erik's question, I think someone also asked us at the Investor Day, when you had your buildup to your 5-year CAGRs in your projections at the Investor Day, you only had 1% to 1.5% pricing. Seemingly, there's a lot of inflationary pressures. And it seems like 1% and 1.5% seems low or out of place, especially with the mix of new products coming in. Can you just help us understand the pricing philosophy and how you came to that 1% to 1.5% number? And then I have a follow-up. Thomas Surran: Sure. Sure, Dan. Thank you. So let's deal with the NPIs. So we've got -- we're pretty excited about the second half of the year. But for instance, on our smoke and CO detector platform that we're introducing. That product will first go into the American market, replacing the eighth edition UL products that are out there. It has a better cost profile to it. It will have a better margin profile to it. We think it performs well. We think it will continue to drive revenue growth. But it's really about creating that global platform that allows us to build even further out. Second, we're introducing the Fortic platform to the marketplace and bringing that all the way across all of our products. That's going to be very important. It's a major effort. It doesn't necessarily in and of itself drive revenue immediately, but long term, it's a very key part of our strategy. Some of the security products that will be built out or brought to the market, I think that they will help drive the revenue. But I think the best thing to think about overall is excluding OEM security products, we are expecting revenue growth across all of the other product areas. So that's the first piece. And the cadence of the NPI, we are seeing momentum. So generally, yes, we are continuing to see more products coming out with shorter development cycles and we are continuing to have a very healthy pipeline for thereafter. In terms of your second question, the pricing. So you're right. If we experience the conditions that we do have experienced recently, memory costs going up 4x, metal costs going up 35%. And now these shortages of things like low thermal expansion fiberglass driving printed circuit boards and all of these shocks from the data centers, 100%. That would be -- these are significant costs. They're able to be currently absorbed by pricing offsets and certain other efforts to try to reduce the cost of our products, but they do have an impact. That said, we do not believe that these will be long-term cost increases. Some of it will stick. But I think long term, we will see these basically roll back up. We're seeing more memory coming online from some of the suppliers related to especially the generations and the geometries that we consume. We kind of have a good visibility of what will be happening. These prices are going to start unwinding as the competition comes to the market, capacity comes available. So I don't think that we're going to see a long-term shortage on thermal expansion fiber. I don't think we're going to see a long-term contraction in the memory supply market. Metals and fuel, those are shocks from what's going on in the world. So those things, yes, they impact the short term, but over a 5-year term, they shouldn't be considered a trend. Dan Stratemeier: All right. Great. You threw one line in there at the end that caught my attention, which was strategically optimize our operations throughout the remainder of the year. What does that mean? What's the magnitude of it? Can you help us understand the drivers of that, if you don't mind, please. Thomas Surran: Yes, we have to be a little -- in terms of discussing some of these things, there's certain sensitivities. But we've spoken about always reviewing our manufacturing footprint and our cost how can we optimize those things to reduce our product costs and we can pass that up both on to the customers as well as improve of our margins. And that's something we're actively doing. We're looking at all of our operations worldwide to take those actions that we think will benefit the company long term. Dan Stratemeier: And is this like above and beyond what you've already always been doing? Thomas Surran: Yes. Yes. Again, Dan, just in terms of this, this is a long-term plan. So when we talk about this, we're talking about things that we want to do over the next 5 years and thereafter actually. But certainly, in the next 5 years, we have specific actions that we want to take that will make a material impact to the company, and we are executing. I mean we talked about the closing of the Tianjin facility, we talked about the closing of Latrobe. We're reviewing our manufacturing footprint. We're optimizing our product manufacturing and the execution in all of our factories. Christopher Lee: Yes. And then just to pile on. I mean, this also is thematic to the replatforming that we've talked about moving from tens or hundreds down to one to a handful by product line. And I think these are all levers that are really under our control. And so I think that's important to understand and ties back into what Tom said this is part of the long-term plan. Thomas Surran: Yes. Those actions improve the efficiency of our operations, but they in and of themselves are only to do that. So we talked about platform. But there's other actions related to the efficiency of our operations. Operator: The next question comes from the line of Ian Zaffino with Oppenheimer & Co. Ian Zaffino: Just wanted to drill down a little bit on the Air and HVAC. Maybe help us understand kind of what the environment is and that you saw in the second quarter? And then how do we think about the rest of the year? I know we had a couple of some softness last year. So what sort of the magnitude of maybe the comp benefit we should get? What is the timing of that? And then also just kind of what happened in the second quarter. Thomas Surran: Sure. So second quarter for us, we were relatively flat year-over-year. We believe the general market was down. So we believe that our volumes since our sales, revenue dollars represented increased volume, but flat revenue. We believe that we did well in the marketplace and our position in the marketplace. When we look forward, what happened last year related to a transition, related to the gases and refrigerants used in the marketplace and the inventory that had been built up in the channel and some shocks related to that. We don't see anything like that happening this year. In terms of I think what we're going to see is kind of a more normalized marketplace. I don't expect large growth right now in HVAC because there's still fundamental drivers for that. But I think really it's on us to create great value products that are able to increase the volumes and our share in the market. Christopher Lee: And look, as we talked about in Tom's prepared remarks, I mean, the adoption of our new products, be it the thermostat, be it the dehumidification product, be it the water filtration product continues to be positive, and we're going to continue that NPI focus, as Tom mentioned, and when you combine that with pretty healthy channel inventory, I think we're well positioned. Ian Zaffino: Okay. And then can you maybe just talk about -- just a follow-up to that question, then I just have another question for that, but what are we thinking about as far as comps going into the back half of the year? And your confidence in that? And then also, can you maybe just give us a broader discussion on price versus volume? And I know you said that a lot of the gains in the quarter were volume -- and there's references to price benefits on the gross margin side. So just trying to understand, like, what's actually going on. Thomas Surran: Okay. So you broke up a bit there, Ian. I didn't catch all of it, but you were talking about the comps? Ian Zaffino: Yes, the comps in... Thomas Surran: Second half. Ian Zaffino: Correct. Thomas Surran: Our expected second half versus last year, prior year. Yes. Okay. We expect growth in the second half of the year in our HVAC market in summary. And in terms of price and volume, looking at that you made a comment, I just want to correct the perception that you thought that the improvement in gross profitability was because of pricing. I would not say that was a correct assumption. If you look at actually what happened in the prior quarter, price was not a contributor to margin at all. Ian Zaffino: Okay. And then just on the HVAC again. Is this a benefit in the third quarter and the fourth quarter -- the fourth quarter? Maybe can you quantify it for us? Christopher Lee: Ian, I think we provided a guidance in totality. We don't get down to the product level or channel level type of guidance look, I think Q3 of last year, those numbers are out there. You can set your estimates on what you think the growth is going to be -- but I think what Tom just said is the market is still a little bit muted. Operator: The next question comes from the line of Tomo Sano with JPMorgan. Tomohiko Sano: Tom, Chris, congrats on the spin. Could you talk about P&S gross margin again, if we look at the 70 basis points year-over-year, could you break down a little bit more color, contributions on volume manufacturing, supply chain execution, productivity, mix and pricing and so on. And to me, if you could add some color, what would you believe you did better than expected. Thomas Surran: We haven't really gone into that level of detail in discussing our margins, I did disclose and just talked about the fact that pricing was not the contributor. The volume in itself is a major contributor. If you really look at kind of what happened in the profitability of the business, it was the execution and the efficiency of the operation. So it's really the conversion cost and the conversion efficiency that drove the gross profit improvement. And in the period, there were these inflationary costs that kind of were offset generally by a little bit of tariff refund. Most of the pricing inflationary costs will actually start hitting us in Q3, Q4. In Q2, though, net-net was somewhat everything offset each other. All these kind of onetime events kind of offset all of it. So we saw a pretty -- at the net of it, a pretty natural level of gross profitability. And so what really drove the improvement with the efficiency of the operations. Tomohiko Sano: And then follow-up is Pro Channel Health. Tell me if you could talk about Pro Channel Health. How should we look at the second quarter performance and the second half expectations. If you could give us more color on active product retention, install time reductions? And any color appreciated. Thomas Surran: Sure. The second half -- so the Pro, I think you're -- the Pro buys through all of the channels that we have and we really -- all of our revenue is driven by the Pro. We do have some retail products. We believe that the primary customer, even at retail is a professional. So I think you're talking about the distribution channels probably more so than the retail channel. We expect in the second half of the year for there to be growth in the distribution channel overall. So I think we expect continued performance in retail as well. I think the one channel, which we mentioned before that we expect the headwinds is that OEM security channel. Operator: The next question comes from the line of Jay Goldberg with D2D Advisory. Jay Goldberg: I just want to follow up on a few comments that you just -- on the last question and also you made in the prior remarks, I was hoping you could give us more color on what you're seeing in the end market. I guess that OEM security is not good, but it sounds like some of the other end markets are looking much more positive. And I was hoping you could talk about those. Thomas Surran: Sure. Thanks, Jay. And nice to also have you on the call. Okay. So we think the market is kind of being a continuation of what we've seen to date. We're not expecting kind of the rising tide for the market to drive our performance. We're going to execute to drive our performance. And so whether it's the housing market, we're certainly not seeing much change in the sales of existing homes. We're not seeing any improvement in the new home construction levels. When we look generally into the market of what people are expecting and either HVAC or security market, it's fairly muted. And I think that's probably the best characterization we can put on it right now. Our goal is to out-execute the market, and that's what we're trying to do. And that's what we expect to do in the second half, again, with the exception of the OEM security. And again, just to be clear, the lean into the OEM security, the commentary is about a large customer. So let's not paint the entirety of the opportunity in that channel negatively. It's 1 customer who's large that we're talking about. Operator: The next question comes from the line of Dan Stratemeier with Jefferies. Dan Stratemeier: Just a question on the OEM customer. Is this like a one-off? What's the overall relationship like, I guess, with that customer going forward? Thomas Surran: Yes. Dan, this is -- so it's Tom responding. So the relationship with the customer, I think, is healthy. I think they just have a different direction they're going. They're pursuing vertical integration. I think the products that we offer to them are still well accepted in the marketplace. I think that they like the product. I think they're just trying to do something different with their own business model. In terms of -- you asked a little bit about the outlook, it sounds like you were trying to understand the trend. This clearly is going to have an impact Q3 somewhat Q4 more so. And then as we go into kind of Q1 of next year, it will kind of be a little more like the Q3 level and then by Q2, we would expect it to kind of plateau. But long term, this is not a strategic business for us. This is a lower-margin business, it's not branded Resideo or First Alert or Honeywell Home sold by a third party and it competes in a market where we create our own products. It could compete in the general market with our own branded offering. So -- we expect this to kind of have a little bit of a stair step. We are under contractual obligations to execute with us, and we are going to do our best to provide great products to this customer and the relationship is healthy in terms of how we get along and everything is very positive on that. There's no problems at all related to that. It's just a strategic decision they've made and how they want to execute their business. Christopher Lee: And just one other point to -- Dan, just one other point to clarify. This activity that Tom just mentioned is already baked into our medium-term financial targets that we presented at Investor Day. Dan Stratemeier: That's helpful. So this is sort of separate then from your refresh that, I believe, is gaining momentum in your security line of branded products. We should think about this as completely separate than that, correct? And I apologize for... Thomas Surran: Totally separate. Yes, yes, you got it. Totally separate. No, no, it was great. Thank you, Dan. Operator: We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Resideo Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Resideo Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $419,408!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,348,694!* Now, it’s worth noting Stock Advisor’s total average return is 966% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 19, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Resideo (REZI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Resideo’s second quarter delivered results that exceeded market expectations, with management highlighting strong execution and performance across key metrics. CEO Thomas Surran emphasized, "we exceeded the high end of the second quarter outlook ranges for all metrics, both the consolidated and business segment level." The company achieved year-over-year revenue growth across substantially all of its sales channels and product families, driven primarily by volume from customer demand. However, Surran acknowledged that operational improvements were partly offset by inflationary input costs and legal settlement expenses, which pressured margins. Is now the time to buy REZI? Find out in our full research report (it’s free). Revenue: $1.98 billion vs analyst estimates of $1.94 billion (2% year-on-year growth, 2.3% beat) Adjusted EPS: $0.83 vs analyst estimates of $0.68 (23% beat) Adjusted EBITDA: $181 million vs analyst estimates of $207 million (9.1% margin, 12.6% miss) The company dropped its revenue guidance for the full year to $2.93 billion at the midpoint from $7.85 billion, a 62.7% decrease EBITDA guidance for the full year is $615 million at the midpoint Operating Margin: 6.6%, down from 9.1% in the same quarter last year Market Capitalization: $3.19 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Erik Woodring (Morgan Stanley) asked for clarification on the magnitude of guidance reductions and the drivers behind lower revenue growth. CEO Thomas Surran explained the impact of OEM security segment softness and clarified that most other channels remain healthy. Dan Stratemeier (Jefferies) sought details on the cadence and scope of upcoming new product introductions, as well as the logic behind the company’s pricing assumptions. Surran discussed the strong NPI pipeline and reiterated that recent input cost spikes are not expected to become long-term trends. Ian Zaffino (Oppenheimer & Co.) inquired about the state of the HVAC market and the split between price and volume effects. Surran clarified that recent gross margin improvement came primarily from operational efficiency and volume, not pricing. Tomohiko Sano (JPMorgan) asked for additional detail on gross margin drivers and the health of the Pro Channel. Surran emphasized that operational execution, not pricing, led to margin gains, and that growth is expected in all channels except OEM security. Jay Goldberg (D2D Advisory) requested more color on end-market demand and the outlook for OEM security. Surran confirmed muted housing and security markets, noting that execution rather than market growth will drive performance. In the coming quarters, the StockStory team will be monitoring (1) the pace and scale of adoption for new product launches in the smoke, CO detector, and security categories, (2) the impact of operational optimization measures—including facility consolidations—on margins and cost structure, and (3) the trajectory of OEM security channel revenue, particularly the extent and duration of the major customer’s pullback. The evolution of input cost pressures will also remain a critical variable. Resideo currently trades at $21.12, down from $25.71 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record quarterly revenue and adjusted EBITDA, driven by strong volume demand across most sales channels, operational efficiencies, and the favorable impact of tariff refunds. Realized the 13th consecutive quarter of gross margin expansion through operational efficiency, favorable manufacturing variances, and supply chain execution. Successfully completed the spin-off of ADI Global Distribution, transitioning the company into a focused, pure-play building technologies entity. Growth in the HVAC distribution channel was led by high customer adoption of the Honeywell Home Elite Pro, expanding Resideo's presence in the premium connected market. Retail channel performance exceeded expectations due to increased volumes for higher-value products, specifically new thermostats and combination smoke/CO detectors. Management attributes gross profit improvement to conversion efficiency and operational execution, while inflationary input cost pressures during the quarter were effectively neutralized by tariff refunds. Strategic focus remains on shifting the portfolio toward higher-margin branded business, intentionally moving away from lower-margin OEM security contracts. Initiated 2026 stand-alone revenue guidance of $2.9 billion to $2.95 billion, assuming continued steady execution despite a persistently soft residential macro environment. Anticipate a $40 million to $50 million revenue headwind in the second half of 2026 due to a large OEM security customer's shift toward vertical integration. Expect a temporary gross margin headwind in Q3 2026 as rising input costs for memory, metals, and semiconductors precede the full impact of implemented price increases. Strategic optimization of the manufacturing footprint and product replatforming are expected to drive material efficiency gains over a five-year horizon. Second-half growth is projected across all channels except OEM security, supported by a healthy pipeline of new product introductions including a global smoke and CO detector platform. Completed a $900 million deleveraging payment on the Term Loan B facility following the ADI spin, with an additional $200 million repayment planned for Q3. Incurred $45 million in nonrecurring business separation costs, including the termination of the Honeywell Tax Matters Agreement. Management flagged significant volatility in memory and metal costs, though these are viewed as cyclical shocks rather than long-term structural trends. The outlook excludes material impacts from recent U.S. trade actions and assumes no further significant tariff refunds for the remainder of the year. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that P&S revenue growth for the year is projected at approximately 3%, despite the specific headwind from the OEM security channel. The second-half outlook remains positive for core channels, with outperformance in the first half providing a strong foundation for the stand-alone targets. Q3 is expected to be the most challenging period for margins due to the lag between rising input costs and the realization of price increases. Management noted that while a 14th consecutive quarter of margin expansion is possible, the primary focus is on recovering inflationary costs through pricing and efficiency. The company is actively reviewing its global manufacturing footprint to reduce product costs and improve long-term margins beyond standard productivity measures. Optimization efforts include moving from hundreds of product platforms down to a handful, which is a key lever for the five-year strategic plan. The revenue decline from a large OEM customer is due to their decision to vertically integrate, rather than a reflection of Resideo's product quality or relationship health. Management emphasized that this business was lower-margin and non-branded, and its exit was already factored into the medium-term financial targets presented at Investor Day.

Interested in Resideo Technologies, Inc.? Here are five stocks we like better. Resideo exceeded its Q2 outlook, with revenue up 2% year over year to nearly $2 billion, adjusted EBITDA up 19% to $249 million, and adjusted EPS up 26% to $0.83. Results included $27 million in favorable tariff refunds. The company completed the ADI Global Distribution spin-off on Aug. 3 and repaid $900 million of debt, with plans to repay an additional approximately $200 million in the third quarter. ADI will be reported as discontinued operations beginning in Q3. Resideo initiated standalone 2026 guidance for revenue of $2.9 billion to $2.95 billion and adjusted EBITDA of $605 million to $625 million, while warning that rising input costs and weaker OEM security demand will pressure results, particularly in the second half. Dueling Insider Moves: Heavy Buying Here, Big Selling There Resideo Technologies (NYSE:REZI) reported second-quarter 2026 results that exceeded the high end of its outlook ranges, while completing the Aug. 3 spin-off of its ADI Global Distribution business and outlining a standalone outlook for the remainder of the year. Chief Executive Officer Tom Surran, speaking on his first earnings call as CEO, said consolidated revenue rose 2% year over year to just under $2 billion, a quarterly record. Adjusted EBITDA increased 19% to a record $249 million, while adjusted earnings per share grew 26% to $0.83. The quarter's adjusted EBITDA included $27 million of favorable tariff refunds, primarily received by ADI. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Surran also thanked former CEO Jay Geldmacher for his six years of service and cited his role in leading Resideo through acquisitions, a recent spin, and changing market conditions. The company separately announced Shane Harrison as its next chief financial officer. Harrison is scheduled to join Sept. 1. Resideo completed the ADI Global Distribution spin-off on Aug. 3. Beginning with third-quarter financial statements, ADI will be classified as discontinued operations for the current and prior periods. Resideo's second-quarter discussion included consolidated results because both the Products & Solutions and ADI segments operated under Resideo during the quarter. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Chris Lee, Resideo's global head of strategic finance, said reported cash provided by operating activities was $148 million in the second quarter, compared with $200 million a year earlier. The decline was driven primarily by about $45 million in non-recurring business separation activities and settlements, including the termination of the Honeywell Tax Matters Agreement, along with a $20 million increase in cash interest paid. Those effects were partly offset by higher net income and lower cash taxes. The company began reducing leverage after the spin-off, repaying $900 million of principal under its Term Loan B credit facility on Aug. 3. Resideo expects to make an additional repayment of approximately $200 million in the third quarter after completion of the post-closing cash adjustment under the separation agreement with ADI. → Apple’s Next iPhone Could Test How Much Pricing Power Is Left ADI is scheduled to host its own earnings call and provide more detail on its results and outlook. Surran said ADI will remain an important partner to Resideo. Resideo's Products & Solutions segment reported 4% year-over-year revenue growth, including an approximately 35-basis-point favorable currency impact. Surran said growth occurred across substantially all sales channels and product families, primarily driven by customer demand and volume. Retail-channel growth was supported by higher-value products, including combination smoke and carbon monoxide detectors and new thermostats. In HVAC distribution, revenue returned to growth, led by customer adoption of the Honeywell Home ElitePRO premium smart thermostat. The company also cited new dehumidification and water-filtration products as contributors to category penetration. In electrical distribution, revenue increased on demand for BRK-branded non-connected safety products, particularly in maintenance, repair and operations markets and manufactured housing. The OEM combustion channel, reported as the energy category, posted its seventh consecutive quarter of year-over-year growth, led mainly by demand for higher-priced products in Europe, the Middle East and Africa. Security distribution revenue was flat amid soft demand for security installations tied to existing-home resales. OEM security revenue declined slightly, reflecting lower volumes from a large customer. Surran said the customer is pursuing greater vertical integration, and the affected business is lower margin and not sold under Resideo, First Alert or Honeywell Home brands. Products & Solutions gross margin reached 43.6%, up 70 basis points from a year earlier and 100 basis points sequentially. Surran attributed the improvement to volume, manufacturing and supply-chain execution, and tariff refunds, partly offset by sales mix. Segment adjusted EBITDA rose 6% year over year, primarily due to higher gross profit dollars. The company continued to invest in research and development, which remained approximately 5% of Products & Solutions revenue. Operating expenses increased largely because of higher legal settlement costs. Management said residential housing conditions remain soft, with little change in existing-home sales or new-home construction. The company expects to grow through product introductions and operational execution rather than broad market improvement. Resideo said costs for memory, metals, printed circuit boards, semiconductors and shipping have increased faster than initially expected. The company implemented price increases during the second quarter, though their benefit will lag because certain customer agreements require notice periods. Management expects the greatest pressure from these temporary input costs in the third quarter before pricing more fully offsets them. Surran said Resideo does not expect material tariff-related cost increases following its assessment of U.S. trade actions announced July 24, nor does it expect material tariff refunds during the rest of 2026. Management expects revenue growth in the second half across all channels except OEM security. Lower volumes from the large OEM security customer are expected to reduce second-half revenue by $40 million to $50 million compared with the prior-year period. The company said the impact will be more pronounced in the fourth quarter and should plateau by the second quarter of the following year. Resideo initiated standalone guidance following the ADI separation. The outlook assumes the company operated independently during the first half of 2026, includes sales to ADI as an external customer, and includes about $80 million of full-year corporate costs allocated to standalone Resideo. Full-year sales to ADI are expected to be approximately $175 million. Full-year 2026 revenue: $2.9 billion to $2.95 billion Full-year 2026 adjusted EBITDA: $605 million to $625 million Third-quarter 2026 revenue: $705 million to $730 million Third-quarter 2026 adjusted EBITDA: $145 million to $155 million The company did not provide standalone guidance for adjusted earnings per share or operating cash flow during the transition period, saying it intends to do so after completing the ADI post-closing cash adjustment. Resideo expects to resume guidance for those measures with its third-quarter earnings call. Looking ahead, Surran highlighted planned second-half launches including a new smoke and carbon monoxide detector platform and new video surveillance and intrusion security products. He also said the company is reviewing its worldwide manufacturing footprint and operations as part of a longer-term effort to improve efficiency, following previously discussed facility closures in Tianjin and Latrobe. Resideo Technologies, Inc, headquartered in Austin, Texas, is a global provider of home comfort, security and energy management solutions. Formed as an independent company in 2018 following its spin-off from Honeywell, Resideo leverages decades of engineering experience to deliver connected products and services to residential and light commercial customers. The company’s core offerings include smart thermostats, security systems, video doorbells, water leak and freeze detection devices, and indoor air quality monitors. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Resideo Technologies Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Resideo Technologies (REZI) came out with quarterly earnings of $0.83 per share, beating the Zacks Consensus Estimate of $0.68 per share. This compares to earnings of $0.66 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +22.06%. A quarter ago, it was expected that this residential comfort and security systems maker would post earnings of $0.61 per share when it actually produced earnings of $0.65, delivering a surprise of +6.56%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Resideo Technologies, which belongs to the Zacks Security and Safety Services industry, posted revenues of $1.98 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.45%. This compares to year-ago revenues of $1.94 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Resideo Technologies shares have lost about 31% since the beginning of the year versus the S&P 500's gain of 12.9%. While Resideo Technologies has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Resideo Technologies was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.70 on $1.96 billion in revenues for the coming quarter and $2.80 on $7.8 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Security and Safety Services is currently in the top 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Lakeland Industries (LAKE), has yet to report results for the quarter ended July 2026. This safety garments manufacturer is expected to post quarterly loss of $0.02 per share in its upcoming report, which represents a year-over-year change of -105.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Lakeland Industries' revenues are expected to be $48.5 million, down 7.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Resideo Technologies, Inc. (REZI) : Free Stock Analysis Report Lakeland Industries, Inc. (LAKE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Revenue of $1.98 billion, up 2% year-over-year; a new record and above the high-end of outlook range; Products & Solutions ("P&S") up 4% and ADI Global Distribution segment ("ADI") up 1% Gross margin of 30.0%, a new record; 13 consecutive quarters of year-over-year gross margin expansion achieved at P&S Net income of $97 million, compared to net loss of $825 million in second quarter of 2025; Adjusted EBITDA (1) of $249 million, up 19% year-over-year; a new record and above the high-end of outlook range GAAP diluted EPS of $0.51; Adjusted EPS (1) of $0.83, up 26% year-over-year and above the high-end of the outlook range Successfully completed the business separation of ADI on August 3, 2026 (2) SCOTTSDALE, Ariz., Aug. 12, 2026 /PRNewswire/ -- Resideo Technologies, Inc. (NYSE: REZI), a leading global developer and manufacturer of critical control and sensing solutions for residential end-markets, today announced financial results for the second fiscal quarter ended July 4, 2026. ADI Global Distribution Spin-Off On August 3, 2026 (the "Distribution Date"), Resideo completed the separation (the "ADI Spin-Off" or the "Separation") of its former ADI Global Distribution segment by distributing to Resideo common shareholders on a pro rata basis all of the issued and outstanding common stock of ADI Global Distribution Inc. ("ADIG"). To effect the Separation, Resideo distributed to its common stockholders one share of ADIG common stock for every two shares of Resideo's common stock outstanding and held as of July 20, 2026, the record date for the distribution. Resideo's consolidated results for the three and six months ended July 4, 2026 include the historical results of ADI as a consolidated business segment of Resideo since the ADI Spin-Off occurred subsequent to the second fiscal quarter. Beginning with the third quarter of 2026, Resideo will no longer consolidate ADI and the historical results of ADI will be reflected as discontinued operations in our financial statements. Also beginning with the third quarter, the results of the P&S segment, with revenue adjusted to reflect ADI as an external customer and to reflect allocated corporate costs, will be presented as "continuing operations" in Resideo's financial statements and results of operations. ADIG has announced that it will present its second quarter and year-to-date results derived from Resideo's accounting records and presented on a carve-out basis on August 13, 2026. Management Remarks "Resideo's second quarter consolidated results were strong, reporting record high revenue and financial results that were above the high-end of the outlook range for all our key financial metrics. The Products and Solutions segment had another standout quarter with year-over-year revenue growth and the thirteenth consecutive quarter of year-over-year gross margin expansion," said Tom Surran, Resideo's President and CEO. "With the business separation now complete, Resideo is entirely focused on leveraging our competitive strengths to increase the value we deliver to customers as a standalone building technologies company. With our track record of execution and our focused strategic plan coupled with a stronger gross and operating margin profile, we are poised to deliver profitable growth and drive greater shareholder value." Consolidated Second Quarter 2026 Financial Highlights Revenue of $1,981 million, up 2% compared to $1,943 million in the second quarter of 2025; a new record and above the high-end of the outlook range Gross margin of 30.0%, up 70 basis points year-over-year, a new record impacted by the receipt of $27 million of tariff refunds, of which approximately $20 million was received by ADI Net income of $97 million, compared to net loss of $825 million in the second quarter of 2025 Adjusted EBITDA (1) of $249 million, up 19% compared to $210 million in the second quarter of 2025; second quarter 2026 Adjusted EBITDA was a new record and above the high-end of outlook range Diluted EPS of $0.51 and Adjusted EPS (1) of $0.83 compared to diluted loss per share of $5.59 and Adjusted EPS(1) of $0.66 in the second quarter of 2025; second quarter 2026 Adjusted EPS (1) was above the high end of the outlook range Cash provided by operating activities was $148 million compared to cash provided by operating activities of $200 million in the second quarter of 2025 Products and Solutions Segment Second Quarter 2026 Highlights Revenue of $695 million, up 4% compared to $666 million in the second quarter of 2025; above the high-end of the segment outlook range Gross margin of 43.6%, up 70 basis points compared to the second quarter of 2025, a new record Income from operations of $138 million, compared to $142 million in the second quarter of 2025 Segment Adjusted EBITDA (1) of $177 million, or 25.5% of revenue, up 6% compared to $167 million, or 25.1% of revenue, in the second quarter of 2025; above the high-end of the segment outlook range P&S revenue of $695 million in the second quarter of 2026 includes a favorable impact of approximately 35 basis points from foreign currency. Revenue grew year-over-year across substantially all of our sales channels and product families due primarily to volume increases given customer demand for our products. Gross margin of 43.6%, compared to 42.9% in the second quarter of 2025 due primarily to volume increases, favorable manufacturing and supply chain variances, and tariff refunds, partially offset by unfavorable product sales mix. We also incurred inflationary input costs that were partially offset by the price actions we announced last quarter. Research and development expenses increased $5 million from the second quarter of 2025 as we continue to invest behind new product launches to drive future growth. Selling, general and administrative expenses were up $6 million from the second quarter of 2025, driven primarily by higher legal settlement costs. Restructuring expenses increased $10 million from the second quarter of 2025 as we continue to strategically optimize our manufacturing and operating footprint. Income from operations of $138 million in the second quarter of 2026 was down 3% from $142 million in second quarter 2025. Segment Adjusted EBITDA (1) of $177 million was up 6% compared to $167 million in the second quarter of 2025. ADI Global Distribution Segment Second Quarter 2026 Highlights Revenue of $1,286 million, up 1% compared to the second quarter of 2025; a new record and above the high-end of the segment outlook range Gross margin of 22.7%, up 50 basis points compared to the second quarter of 2025 Income from operations of $64 million, compared to $71 million in the second quarter of 2025 Segment Adjusted EBITDA (1) of $103 million, or 8.0% of revenue, down 4% compared to $107 million or 8.4% of revenue in the second quarter of 2025; above the high-end of the segment outlook range ADI second quarter 2026 revenue of $1,286 million reflects average daily sales growth of 2% year-over-year and one fewer sales day in the current quarter. Revenue growth was driven by security, professional audio-visual, and data communications categories, partially offset by weakness in the residential audio-visual category due primarily to a continued soft U.S. residential housing market. Gross margin was 22.7%, compared to 22.2% in the second quarter of 2025, and was favorably impacted by the receipt of tariff refunds of approximately $20 million, partially offset by unfavorable price and mix shift and higher fuel costs for freight. Research and development expenses increased $2 million from the second quarter of 2025 due primarily to investments supporting new product launches to drive future growth. Selling, general and administrative expenses were up $8 million from the second quarter of 2025, driven primarily by higher employee and facility costs. Restructuring expenses increased $4 million from the second quarter of 2025 and were related to the optimization of ADI's operating footprint to better align its cost structure with strategic objectives. Income from operations of $64 million in the second quarter of 2026 was down 10% from $71 million. Adjusted EBITDA (1) of $103 million decreased 4% compared to $107 million in the second quarter of 2025. Cash Flow and Liquidity Net cash provided by operating activities was $148 million in the second quarter of 2026, compared to net cash provided by operating activities of $200 million in the second quarter of 2025. The decrease was driven primarily by approximately $45 million of non-recurring business separation costs and settlement payments, including the payment made in connection with the termination of the Honeywell Tax Matters Agreement, and $20 million of higher cash interest paid, partially offset by higher net income and less cash taxes paid. At July 4, 2026, Resideo had cash, cash equivalents, and restricted cash of $949 million, which included $400 million of cash proceeds from the ADIG notes offering that were funded into escrow. The proceeds of the ADIG notes offering were released to ADIG in connection with the consummation of the ADI Spin-Off and satisfaction of the escrow release conditions. Resideo had total outstanding debt of $3.62 billion at July 4, 2026. In connection with the ADI Spin-Off, the $400 million of ADIG notes were moved onto the ADIG balance sheet. The ADIG notes are no longer an obligation of Resideo or any of its subsidiaries and will not be included in future balance sheets for Resideo. Also in connection with the ADI Spin-Off, Resideo received a $900 million dividend from ADIG and used the proceeds to repay $900 million of outstanding principal under its Term Loan B credit facility. Resideo expects to make a further repayment of approximately $200 million under its Term Loan B credit facility following the completion of the post-closing cash adjustment under the separation agreement with ADIG. We expect to make this repayment by the end of the third fiscal quarter. Resideo's outstanding Series A Cumulative Convertible Participating Preferred Stock ("Preferred Stock") was reduced by 150,000 shares in connection with the completion of the ADI Spin-Off, leaving 350,000 shares outstanding, with a proportional adjustment to the conversion price thereof. On a go-forward basis, this will result in a proportionally smaller quarterly dividend payable on Resideo's outstanding Preferred Stock. Standalone Resideo Outlook Resideo is initiating a standalone 2026 outlook for the third quarter and the full year. This standalone outlook is presented as if we had operated as a standalone company for the first half of 2026 coupled with our standalone outlook for the remainder of the year. Conference Call and Webcast Details Resideo will hold a conference call with investors on August 12, 2026, at 5:00 p.m. ET. The webcast can be accessed at https://investor.resideo.com, where the webcast link and related materials will be posted before the call. A replay of the webcast will be available following the presentation. About Resideo Resideo is a global building technologies company that is a leading developer and manufacturer of critical control and sensing solutions for residential markets. The company serves professional installers and integrators across diverse product categories, such as heating, ventilation, and air conditioning controls, combustion, life safety, security, and water. Its comfort and protection solutions can be found in more than 150 million residential and commercial spaces globally, with tens of millions of new devices sold annually. More information about Resideo and its trusted brands, including BRK, First Alert, and Honeywell Home, is available at resideo.com. Forward-Looking Statements This release and the related conference call contain "forward-looking statements." All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks and uncertainties, which may cause the actual results or performance of the Company to differ materially from such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) our ability to achieve our outlook regarding the third quarter 2026 and full year 2026, (2) the ability of Resideo to drive increased customer value and financial returns and enhance strategic and operational capabilities, (3) risks and uncertainties relating to tariffs that have been or may be imposed by the United States and other governments, (4) risks related to our ability to achieve some or all of the expected benefits of the separation of Resideo Technologies' Products & Solutions and ADI Global Distribution businesses into two independent publicly traded companies, (5) our ability to repay outstanding debt obligations on the timing we anticipate or at all, and (6) the other risks described under the headings "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements" in our Annual Report on Form 10-K for the year ended December 31, 2025 and other periodic filings we make from time to time with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance, and actual results, developments, and business decisions may differ from those envisaged by our forward-looking statements. Except as required by law, we undertake no obligation to update such statements to reflect events or circumstances arising after the date of this press release and we caution investors not to place undue reliance on any such forward-looking statements. Use of Non-GAAP Measures This press release includes certain "non-GAAP financial measures" as defined under the Securities Exchange Act of 1934 and in accordance with regulations issued thereunder. Management believes the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting financial results between periods on a more comparable basis. Such non-GAAP financial measures should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. Readers should also consider the limitations associated with these non-GAAP financial measures, including the potential lack of comparability of these measures from one company to another. We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with U.S. GAAP at the end of this release. A reconciliation of the forecasted range for Adjusted EBITDA for the third quarter of 2026 and for the full year 2026 is not included in this release due to the number of variables in the projected range and because we are currently unable to quantify accurately without unreasonable efforts certain amounts that would be required to be included in the U.S. GAAP measure or the individual adjustments for such reconciliation. In addition, we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors. However, for the third quarter of 2026 and full year 2026 respectively, on a standalone company basis, we anticipate the following expenses in our GAAP to non-GAAP reconciliation: depreciation and amortization of $23 million and $91 million, interest expense, net of $32 million and $129 million, and stock-based compensation expense of $8 million and $32 million. . View original content to download multimedia:https://www.prnewswire.com/news-releases/resideo-announces-record-second-quarter-2026-financial-results-initiates-standalone-2026-outlook-302850103.html

Cadre Holdings, Inc. (CDRE) came out with quarterly earnings of $0.26 per share, missing the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.3 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -10.35%. A quarter ago, it was expected that this company would post earnings of $0.09 per share when it actually produced earnings of $0.15, delivering a surprise of +66.67%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Cadre Holdings, Inc., which belongs to the Zacks Security and Safety Services industry, posted revenues of $207.13 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 16.11%. This compares to year-ago revenues of $157.11 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cadre Holdings, Inc. shares have lost about 24.3% since the beginning of the year versus the S&P 500's gain of 13%. While Cadre Holdings, Inc. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cadre Holdings, Inc. was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.42 on $192.36 million in revenues for the coming quarter and $1.47 on $736.75 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Security and Safety Services is currently in the top 45% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Resideo Technologies (REZI), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This residential comfort and security systems maker is expected to post quarterly earnings of $0.68 per share in its upcoming report, which represents a year-over-year change of +3%. The consensus EPS estimate for the quarter has been revised 1.9% higher over the last 30 days to the current level. Resideo Technologies' revenues are expected to be $1.93 billion, down 0.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadre Holdings, Inc. (CDRE) : Free Stock Analysis Report Resideo Technologies, Inc. (REZI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Barrick Mining Corporation B is slated to come up with second-quarter 2026 results before the opening bell on Aug. 10. Barrick beat the Zacks Consensus Estimate for earnings in three of the last four quarters and reported in-line results on the other occasion. In this timeframe, it delivered an earnings surprise of roughly 14.1%, on average. Higher realized gold prices and increased production are expected to have aided its second-quarter performance amid cost headwinds.B’s shares have shot up 78% over the past year, outperforming the Zacks Mining – Gold industry’s 29.7% increase. Image Source: Zacks Investment Research Let’s see how things are shaping up for this announcement. The Zacks Consensus Estimate for Barrick’s second-quarter consolidated sales is currently pegged at $4,487.7 million, calling for an increase of 21.9% from the year-ago quarter’s tally. Higher realized gold prices are likely to have supported the company’s performance in the second quarter. While gold prices have pulled back sharply from their January 2026 highs, they remain supportive. Heightened geopolitical tensions, a weaker U.S. dollar and tariff-related worries drove bullion to a record high of nearly $5,600 per ounce in late January. Since then, gold has pulled back sharply due to inflation concerns triggered by a surge in crude oil prices amid Middle East tensions. While gold started April near $4,800 per ounce, prices tumbled to $4,500 per ounce around the end of May. Bullion continued to retreat in June, with prices slipping below $4,000 per ounce to a near eight-month low amid rate-hike expectations and a stronger greenback, despite reduced inflation concerns following the interim agreement between the United States and Iran. Notwithstanding the pullback, Barrick is expected to have gained from higher year-over-year realized prices.  The consensus estimate for B’s average realized gold price is pinned at $4,507 per ounce for the second quarter, indicating a roughly 37% year-over-year increase. Higher production is expected to have aided B’s sales volumes in the second quarter. Barrick saw a 5% year-over-year and 17% sequential decline in first-quarter 2026 gold production to 719,000 ounces. However, it expects production to increase sequentially, with second-quarter gold production projected in the band of 730,000-770,000 ounces. The uptick is expected to be driven by the ramp-up across Loulo-Gounkoto and Goldrush mines, as well as mine sequencing across the NGM sites.  The consensus estimate calls for a gold production of roughly 764,000 ounces in the second quarter, indicating a roughly 6% sequential rise.  Barrick is likely to have faced headwinds from higher production costs in the second quarter. It saw an 8% sequential increase in all-in-sustaining costs (AISC) — a critical cost metric for miners — in the first quarter, reaching $1,708 per ounce. Cost pressures are expected to have continued in the second quarter. The consensus estimate for AISC for the second quarter is pegged at $1,884, indicating a roughly 12% year-over-year and 10% sequential increase. Barrick Mining Corporation price-eps-surprise | Barrick Mining Corporation Quote Our proven model does not conclusively predict an earnings beat for Barrick this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.Earnings ESP: Earnings ESP for B is -0.49%. The Zacks Consensus Estimate for the second quarter is currently pegged at 81 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: B currently carries a Zacks Rank #4 (Sell). Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:Sociedad Química y Minera de Chile S.A. SQM, scheduled to release earnings on Aug. 18, has an Earnings ESP of +0.08% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for SQM’s earnings for the second quarter is currently pegged at $2.03.Ferguson Enterprises Inc. FERG, slated to release earnings on Aug. 10, has an Earnings ESP of +1.22% and carries a Zacks Rank #3 at present.The consensus mark for FERG’s second-quarter earnings is currently pegged at $3.23. Resideo Technologies, Inc. REZI, scheduled to release earnings on Aug. 12, has an Earnings ESP of +6.83%.The Zacks Consensus Estimate for REZI's earnings for the second quarter is currently pegged at 68 cents. REZI currently carries a Zacks Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Barrick Mining Corporation (B) : Free Stock Analysis Report Sociedad Quimica y Minera S.A. (SQM) : Free Stock Analysis Report Resideo Technologies, Inc. (REZI) : Free Stock Analysis Report Ferguson plc (FERG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research