Key Highlights

  • Net Revenue rose 8.6% to USD 1,306 million in the third quarter.
  • Gross profit was USD 273 million, with gross Margin at 20.9%.
  • A Goodwill Impairment of USD 659 million was recorded in the quarter.
  • Net proceeds of USD 988 million came from the 2034 notes and term facility.

ADI Global Distribution (NYSE:ADIG) reported third-quarter 2026 net revenue of USD 1,306 million, up 8.6% from USD 1,203 million a year earlier. The figure compares with an estimate of USD 1.27 billion. Loss per share was USD 8.65, against an estimate of Earnings of USD 0.44. The company became an independent, publicly traded company through its separation from Resideo, and its common stock began regular way trading on the New York Stock Exchange on August 4, 2026.

Margins, Expenses and the Impairment

Gross profit for the three months ended October 3, 2026 was USD 273 million, an increase of USD 1 million, or 0.4%. Gross margin was 20.9%, down 170 basis points from 22.6% in the prior-year period. Cost of Goods Sold rose USD 102 million, or 11.0%, to USD 1,033 million.

Selling, general and administrative expenses were USD 202 million, up USD 12 million, or 6.3%. Research and Development expenses were USD 10 million, down USD 1 million. The company recorded an impairment of goodwill of USD 659 million, with no comparable charge in the prior-year quarter.

The filing explains the impairment by pointing to continued weakness in the residential market, which affected Demand for exclusive Brand products. It also cites unfavorable product and customer mix shifts, which contributed to a change in the company's near-term outlook. Management updated its financial projections, including revised near-term revenue and Operating Margin figures, as part of the assessment.

Net loss for the nine months ended October 3, 2026 was USD 650 million, against a net loss of USD 272 million in the prior-year nine months. Income tax expense was USD 2 million for the quarter and USD 3 million for the nine months, compared with a net tax benefit of USD 1 million and an income tax expense of USD 9 million a year earlier.

Nine-Month Results and Financing

For the nine months, net revenue was USD 3,798 million, against USD 3,601 million a year earlier. Gross Profit was USD 821 million, an increase of USD 24 million, or 3.0%, and gross margin was 21.6%, down 50 basis points from the prior year.

Net cash provided by financing activities was USD 116 million for the nine months, a decrease of USD 500 million from USD 616 million a year earlier. The filing attributes the decrease mainly to a USD 900 million Dividend distribution to the former parent in connection with the spin-off. It also cites a USD 523 million decrease in net transfers to the former parent and a USD 60 million increase in net cash outflows to related parties from cash pooling arrangements. These were partly offset by USD 988 million of net proceeds from the Senior Notes due 2034 and the term facility.

Credit Facilities and Reported Reference Points

On August 3, 2026, with the completion of the spin-off, the company borrowed USD 600 million under the term Facility portion of its Credit agreement. A five-year USD 500 million revolving facility also became available, and no amounts had been drawn under it. Borrowings carry interest at either a Base Rate or the Secured Overnight Financing Rate, plus an applicable margin. The Senior Notes due 2034 carry a rate of 7.125%.

In connection with the separation, the company issued 150,000 shares of Series A Cumulative Convertible Participating Preferred Stock to Resideo, which Resideo delivered to holders of its own preferred stock in exchange for a portion of their holdings.

The reported items for the quarter are net revenue of USD 1,306 million, gross margin of 20.9%, the USD 659 million goodwill impairment, the USD 600 million term borrowing and the first month of trading under the ticker shown in the company name on the New York Stock Exchange.