Resideo Beats Forecasts, Fuels Momentum for Strategic ADI Spin-Off

SCOTTSDALE, Ariz. – May 12, 2026 – Resideo Technologies, Inc. (NYSE: REZI) today announced robust first-quarter financial results that surpassed its own forecasts, delivering a significant boost in revenue and profit as it prepares for a landmark separation of its business later this year.

The smart home and security solutions provider reported net revenue of $1.91 billion, an 8% increase year-over-year, alongside a dramatic surge in net income to $38 million, up from just $6 million in the same quarter of 2025. The strong performance provides a solid financial tailwind for the company's plan to spin off its ADI Global Distribution business into a separate, publicly traded entity.

"Our first quarter results reflect the continued strong operational execution of both businesses in a dynamic macro-economic environment, resulting in results that exceeded the high end of our outlook range for all financial metrics," said Jay Geldmacher, Resideo's President and CEO, in a statement. The results add weight to the company's strategic vision as it approaches a pivotal transformation.

Strong Segments Pave Way for Separation

Both of Resideo's core business segments delivered solid growth, underpinning the company's overall success in the first quarter. The Products & Solutions (P&S) division, which includes well-known brands like Honeywell Home and First Alert, saw its revenue climb 9% to $706 million. This growth was attributed to effective price realization and strong customer demand for new products in retail and electrical distribution channels.

The ADI Global Distribution arm also posted an 8% revenue increase to $1.21 billion, driven by demand in the security, professional audio-visual, and data communications categories. This performance comes as Resideo moves forward with its plan to separate ADI into an independent public company, a process expected to conclude between the third and fourth quarters of 2026.

The company filed a Form 10 registration statement with the SEC in May, a critical milestone for the spin-off. The strategic rationale is to create two more focused, industry-leading companies, each with the flexibility to pursue tailored growth strategies and capital allocation. As part of the separation, ADI is expected to incur approximately $1.0 billion in new debt, with about $900 million of that being paid as a one-time cash dividend to the remaining Resideo entity. This move is designed to fortify the post-separation balance sheet of the P&S-focused company.

Navigating Economic Crosswinds

Resideo's ability to outperform its outlook is particularly notable given the challenging economic landscape. The first quarter of 2026 was marked by fluctuating mortgage rates and cautious consumer sentiment in the housing market. Despite this, the company successfully navigated these headwinds.

While the ADI segment experienced some softness in the U.S. residential audio-visual market, its growth in commercial categories compensated for the dip. The P&S segment's growth, fueled by both pricing and new product innovation, demonstrates resilience in its core markets of HVAC controls, safety, and security. The company's increased investment in research and development—up $9 million in the P&S segment alone—signals a commitment to driving future growth through innovation.

However, the quarter was not without its challenges. ADI’s gross margin slipped by 40 basis points to 21.2%, which the company attributed to higher fuel costs for freight and an unfavorable product sales mix. This highlights the margin pressures facing the distribution industry, a trend also seen with competitors. For instance, while major distributor Wesco International reported stronger revenue growth of 14%, its adjusted EBITDA margin of 6.4% underscores the tight-margin environment in which ADI's 5.5% adjusted EBITDA margin is positioned.

A Deeper Dive into Financial Health

A closer look at the financials reveals a complex but largely positive picture. The company’s Adjusted EBITDA, a non-GAAP measure of profitability, surged 28% year-over-year to $215 million. Adjusted earnings per share (EPS) also edged up to $0.65, beating company guidance. The P&S segment was a standout, with its Adjusted EBITDA margin expanding to an impressive 25.1%.

One blemish on the report was a significant increase in cash used by operating activities, which rose to $145 million from $65 million in the prior-year quarter. The company explained this was driven primarily by costs related to the ADI business separation, higher cash interest payments, and working capital shifts. Importantly, Resideo reaffirmed its full-year 2026 cash flow outlook, excluding separation-related payments, suggesting management views the quarterly cash burn as a temporary and planned expense rather than a sign of underlying operational weakness.

The P&S segment's GAAP income from operations was down slightly to $128 million from $136 million last year. This was largely due to an $18 million one-time litigation settlement and $7 million in restructuring expenses as the company optimizes its manufacturing footprint. By classifying the settlement as a one-time event, the company signals to investors that this drag on profitability is not expected to recur.

A Look Ahead: Outlook and Leadership Transition

Bolstered by its strong start to the year, Resideo reaffirmed its full-year 2026 outlook, projecting total revenues between $7.8 billion and $7.9 billion and Adjusted EPS between $3.00 and $3.20. The company also initiated guidance for the second quarter, anticipating continued growth with revenue projected to be between $1.92 billion and $1.94 billion.

Looking beyond the numbers, the company has also laid out a clear leadership succession plan for the post-spin-off era. CEO Jay Geldmacher will retire upon completion of the separation. Thomas Surran, who has led the P&S business since 2023, will become President and CEO of the new, more focused Resideo. Meanwhile, Robert Aarnes, the current President of ADI, will assume the role of President and CEO of the newly independent ADI Global Distribution, which plans to trade under the ticker symbol "ADIG." This clarity on future leadership provides stability as both entities prepare to embark on their independent paths, more focused strategic paths.