Resideo Technologies, Inc. Q4 FY2025 earnings call

• Jay Geldmacher noted Resideo finished 2025 largely exceeding financial outlook, Products & Solutions had better-than-expected activity across multiple channels including HVAC, ADI achieved operational stabilization. Resideo reported record highs in net revenue, adjusted EBITDA, and adjusted EPS. • Thomas Surran discussed Products & Solutions team closing out the year strongly with 11th consecutive quarter of year-over-year gross margin expansion, details on Q4 net revenue growth, activities in primary sales channels like retail, electrical distribution, OEM, security, and HVAC channels, and profitability details. • Robert Aarnes talked about ADI's Q4 performance, ERP system being fully operational, details on net revenue, product categories, e-commerce, new product introductions, and profitability, and progress on Snap One synergy achievement.

Products & Solutions: In 2025, grew organic net revenue by 4% year-over-year, driven primarily by strong volume demand for safety products and increased prices for OEM products. Q4 net revenue grew 6% year-over-year, including ~1% favorable currency impact. Revenue grew due to volume and price across many product families and sales channels. HVAC channel revenue down low to mid-single digits but starting to see inventory normalization. Gross margin in Q4 was 41%, up 20 basis points year-over-year. ADI: 2025 grew organic net revenue by 3% year-over-year, driven by growth across all product categories with 3 less selling days. Q4 saw small year-over-year decline in net revenue and average daily sales, 7th consecutive quarter of year-over-year gross margin expansion. E-commerce net revenue and average daily sales grew 3% year-over-year. Exclusive brands net revenue increased 2% year-over-year. Snap One synergy achievement progressing well.

• 2026 financial outlook: Total company net revenue expected to be in the range of $7.8 billion to $7.9 billion. Total company adjusted EBITDA expected to be in the range of $935 million to $985 million. Total company diluted earnings per share expected to be in the range of $3 to $3.20. • Q1 2026: Total company net revenue expected to be in the range of $1.866 billion to $1.890 billion. Total company adjusted EBITDA expected to be in the range of $193 million to $207 million. Total company diluted earnings per share expected to be in the range of $0.58 to $0.62. • Anticipate both business segments to achieve year-over-year net revenue growth in 2026, ADI growth rate higher than Products & Solutions, slightly higher revenue in second half vs first half, very modest total company gross margin expansion, drive greater operating leverage in 2026, not providing 2026 cash provided by operations outlook due to separation-related cost uncertainty.

Q: Clarification on HVAC inventory situation in ERP upgrades.

A: ADI's ERP system implementation is fully behind us. For HVAC, large distributors have taken down inventory levels below historical norms and are readjusting, most inventory adjustment is behind us.

Q: ADI growth and margin reacceleration.

A: Video surveillance category had decline but is recovering, commercial security categories were up year-over-year, expect video surveillance to return to growth.

Q: 2026 guide deceleration.

A: Factors include sales days impact and last year's headwinds.

Q: P&S and ADI growth in 2026.

A: Excited about P&S product launches but market and macro uncertainties exist, guide is prudent.

Q: Spin-off timing and milestones.

A: Spin is progressing in second half of 2026, on time line, holding Investor Days, filing Form 10 will indicate more info.

Q: Snap One and Control4.

A: Snap One deal is complementary, working on products for light commercial customers, Control4 new operating system launched and on road map.

Q: Margin ramp and new product trade-off.

A: Products offer superior value efficiently, not purely linear, but continuing to improve, executing strategy in markets, expecting opportunities to click when market normalizes.