Resideo Technologies (NYSE:REZI) reported fourth-quarter and full-year 2025 results that management said largely exceeded its outlook, supported by a stronger-than-expected finish in its Products and Solutions business and operational stabilization at ADI Global Distribution following completion of a major ERP implementation.
Full-year 2025 results set records, management says
Chief Executive Officer Jay Geldmacher said Resideo delivered record highs in net revenue, Adjusted EBITDA, and adjusted earnings per share for the full year, while also exceeding the high end of its 2025 outlook ranges for net revenue, Adjusted EBITDA, adjusted EPS, and adjusted cash provided by operations.
- Net revenue: approximately $7.5 billion, up 11% year-over-year
- Adjusted EBITDA: $833 million, up 20%
- Adjusted EPS: $2.68, up 17%
- Adjusted cash provided by operations: $453 million, up 2%
Geldmacher said Products and Solutions grew organic net revenue 4% in 2025, driven by volume demand for safety products and price increases for OEM products, while gross margin expanded 110 basis points on operational efficiency improvements. He also highlighted 10 major new product introductions during the year, including the First Alert SC5 Connected Smoke and Carbon Monoxide Detector and the Honeywell Home ElitePRO thermostat.
For ADI, management said organic net revenue increased 3% for the year, helped by growth across all product categories despite three fewer selling days, with organic average daily sales growth of 4%. ADI’s gross margin expanded 200 basis points year-over-year, which management attributed to favorable product mix and sales of lower-cost inventory. Geldmacher said integration of Snap One was proceeding well.
Fourth-quarter performance: P&S growth offsets ADI softness
President of Products and Solutions Tom Surran said the segment closed the year with “healthy net revenue growth” and its 11th consecutive quarter of year-over-year gross margin expansion. In the fourth quarter, Products and Solutions net revenue increased 6% year-over-year, including an approximate 1% favorable impact from currency, driven by volume and price gains across many product families and sales channels. That performance more than offset softer results in air products tied to an “improving” but still soft HVAC channel.
Surran highlighted strong retail-channel growth and a record-high quarter in revenue dollars, supported by robust point-of-sale volumes for higher-priced products and broad-based demand. He also cited strong electrical distribution growth, including record-high annual revenue in 2025 for BRK branded safety products, and noted increasing “dollar content” per new home as Resideo broadened penetration with home builders despite a soft housing market. OEM revenue increased for a fifth consecutive quarter, aided by stabilization in boiler heating systems.
In HVAC, Surran said fourth-quarter revenue declined by a low- to mid-single-digit percentage year-over-year but was “better than anticipated” as colder weather increased user demand among smaller distribution customers. He said larger distributors continued to manage inventory down as expected, but the company was “starting to see normalization” in channel inventories. Surran also said Resideo began shipping the new Honeywell Home ElitePRO Premium Smart Thermostat during the quarter and demand exceeded available stock.
On profitability, Surran said fourth-quarter Products and Solutions gross margin was 41%, up 20 basis points year-over-year, driven by improvements in factory utilization and partially offset by product mix. He added that Adjusted EBITDA rose 6% year-over-year even with planned R&D investments.
At ADI, President Rob Aarnes said fourth-quarter net revenue declined slightly year-over-year, and average daily sales also fell 50 basis points; both metrics included an approximately 80 basis-point favorable impact from currency. Aarnes said growth in multiple commercial, security, and professional audiovisual categories was more than offset by a decline in video surveillance, which he characterized as a multi-month sales cycle business where the “pipeline is refilling nicely.”
Aarnes emphasized that ADI is now “fully operational” on its new ERP system, which he said improved customer confidence and enabled the team to refocus on customer service and share gains. He also noted that e-commerce net revenue and average daily sales increased 3% year-over-year, citing positive returns from digital investments such as increased after-hours revenue and improved add-to-cart and conversion rates following product page enhancements.
ADI’s fourth-quarter gross margin was 22.7%, up 110 basis points year-over-year, supported by price and mix, marking its seventh consecutive quarter of gross margin expansion. However, Aarnes said a small year-over-year decline in Adjusted EBITDA reflected higher SG&A tied to completing the ERP implementation and ongoing investments in real estate and digital.
Quarterly financials: revenue tops outlook; EPS pressured by interest expense
Chief Financial Officer Mike Carlet said fourth-quarter total net revenue was $1.895 billion, up 2% year-over-year, including a 1% favorable impact from currency and above the high end of the company’s outlook range. Gross margin was 29.6%, up 110 basis points year-over-year, driven by operating efficiencies at Products and Solutions and favorable price and mix at ADI.
Adjusted EPS was $0.50, at the high end of the outlook range, but down from $0.59 in the prior-year quarter. Carlet attributed the decline primarily to higher interest expense of approximately $20 million related to incremental debt incurred to terminate the Honeywell indemnification agreement.
Adjusted EBITDA was $226 million, up 21% year-over-year and above the high end of the outlook range. Carlet said the increase was driven by higher net income, “in part by the $35 million benefit associated with” the terminated indemnification agreement.
Reported cash provided by operating activities was $299 million, which Carlet said was higher than anticipated due to strong cash collections and timing of payments. He also said the company received a net operating cash benefit of approximately $40 million year-over-year associated with the terminated agreement.
2026 outlook: cautious macro assumptions, growth expected in both segments
Carlet said Resideo’s 2026 outlook is provided “without regard to the business separation” anticipated in the second half of 2026. He described the company’s macro view as cautious amid geopolitical uncertainty. On tariffs, he said the company’s assumption is that exemptions under USMCA and for certain electronic goods will continue, and that Resideo will take proactive steps to mitigate tariff costs.
Resideo’s market assumptions include little growth in the 2026 U.S. residential housing market, low single-digit growth in repair and remodel, and low single-digit U.S. GDP growth in commercial markets amid mixed signals. The forecast is based on December 31, 2025 currency rates with no assumed future currency fluctuations.
For 2026, management expects both segments to grow year-over-year, with ADI forecast to grow faster than Products and Solutions. Resideo also expects “very modest” total company gross margin expansion, with Products and Solutions expanding more than ADI, and R&D expense as a similar percentage of revenue to the second half of 2025 run-rate. The company did not provide an outlook for 2026 cash provided by operations due to uncertainty around separation-related costs and timing, but said cash provided by operations excluding separation-related payments is expected to be similar to 2025.
Resideo’s guidance ranges were:
- Full-year 2026 net revenue: $7.8 billion to $7.9 billion
- Full-year 2026 Adjusted EBITDA: $935 million to $985 million
- Full-year 2026 diluted EPS: $3.00 to $3.20
- First-quarter 2026 net revenue: $1.866 billion to $1.890 billion
- First-quarter 2026 Adjusted EBITDA: $193 million to $207 million
- First-quarter 2026 diluted EPS: $0.58 to $0.62
Separation planning and Snap One integration updates
Geldmacher said the company’s separation planning is progressing and reiterated that Resideo intends to provide more details in coming months as it approaches a separation “anticipated to occur in the second half of 2026.” In the Q&A, management said the process was progressing in line with expectations, with no surprises or impediments cited, and noted that a future public Form 10 filing would be a key milestone.
On ADI’s acquisition of Snap One, Aarnes said Resideo achieved approximately $75 million of synergies in 2025, “18 months sooner than expected,” and is targeting additional synergies over the next 18 months, including footprint optimization through store and distribution center rationalization. He also described plans to leverage Snap One’s R&D capabilities to develop products for light commercial customers, with some products expected to begin hitting later in 2026 and into 2027. Aarnes added that ADI launched the Control4 X4 operating system in April 2025 and said the Control4 business returned to growth for the year, with plans to refresh upgrades on an 18- to 24-month cadence.
About Resideo Technologies (NYSE:REZI)
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.
