Highlights

  • Second quarter revenue rose 2.0% to $1.98 billion, and gross margin improved to 30.0% from 29.3% a year earlier.
  • Diluted earnings per share were $0.51 versus a loss of $5.59, when an $882 million Honeywell indemnification expense was recorded.
  • Resideo completed the tax-free ADI spin-off on August 3; future revenue, operating income and cash flows will be materially reduced.
  • Management expects standalone net leverage to be higher than before and anticipates 2026 revenue growth in the low-to-mid-single-digit range.

Resideo Technologies (NYSE:REZI) shares were trading near their 52-week low at USD 17.47 on October 21, 2026, up 2.34%. The sensing and controls company filed its second quarter 2026 report on Form 10-Q on August 12, nine days after completing the tax-free spin-off of its ADI Global Distribution business.

Based in Scottsdale, Arizona, Resideo is a Delaware corporation that makes and distributes technology-driven sensing and controls products for homes and businesses, spanning heating, ventilation and air conditioning controls, smoke and carbon monoxide detection, home safety and security. Its brands include Honeywell Home and First Alert, and its solutions are found in more than 150 million residential and commercial spaces. It reported two segments for the period, Products and Solutions and ADI Global Distribution, a specialty distributor of low-voltage products that is now independent as ADIG. Resideo separated from Honeywell in October 2018, and its fiscal year ends December 31.

Second Quarter Results Include ADI and a Profit Swing

The statements for the quarter ended July 4, 2026 still include ADI because the spin-off occurred after period end. Revenue was $1.98 billion, up $38 million from $1.94 billion, mainly on price and mix. Income from operations fell to $131 million, or 6.6% of revenue, from $177 million, or 9.1%, as research and development rose to $48 million, restructuring reached $22 million and business separation costs added $31 million.

Net income was $97 million against a net loss of $825 million a year earlier, when the company recorded an $882 million expense tied to its Indemnification Agreement with Honeywell, later terminated. Diluted EPS was $0.51 versus a loss of $5.59. The latest quarter included $81 million of other income, chiefly a $77 million benefit from terminating the Tax Matters Agreement with Honeywell, for which Resideo paid about $12 million in June. Net interest expense nearly doubled to $46 million on about $1.2 billion of added debt.

By segment, Products and Solutions revenue grew 4.4% to $695 million on higher volumes, while ADI revenue edged up 0.7% to $1.29 billion, with lower volumes offset by price and mix. ADI operating income fell to $64 million from $71 million, even with $20 million of tariff refunds. For six months, revenue was $3.89 billion, up 4.8%, and net income was $135 million. Operating cash flow was $3 million versus $135 million, and a first quarter litigation settlement and arbitration award totaled $24 million.

ADI Spin-Off, Debt and Liquidity

Resideo stockholders received one ADIG share for every two Resideo shares held on the July 20 record date. The company warned that its consolidated revenue, operating income and cash flows will be materially reduced, and that because most debt stays with Resideo, its standalone net leverage ratio is expected to be higher than the consolidated ratios reported earlier.

At July 4, Resideo held $549 million of cash, 46% of it in foreign subsidiaries, plus $400 million of restricted escrow proceeds from ADIG notes that were released to ADIG at the spin-off. Gross long-term debt was $3.62 billion, including $2.32 billion under its credit agreement. ADIG funded a one-time $900 million cash dividend to Resideo, which repaid $518 million and $382 million of term loans, and Resideo expects a further repayment of about $200 million by the end of the third quarter. It was in compliance with all covenants and made no share repurchases in the quarter.

2026 Outlook and Tariffs

Management anticipates 2026 revenue growth in the low-to-mid-single-digit range year over year, based on slow growth in U.S. housing, moderating non-residential construction and a continued slowdown with a large security OEM customer in the second half. The filing does not split this outlook between Resideo and ADIG.

Most Mexico-made products are duty free under USMCA or qualify for exceptions. Section 301 tariffs of 10% to 12.5% took effect July 24, 2026, and Section 232 metals tariffs of 15% to 50% on some finished goods began April 6, but the company does not expect a material impact.