Editor’s Note
This article provides a brief overview of Resideo Technologies (NYSE: REZI), a company spun off from Honeywell in 2018. It operates in two main segments: manufacturing home comfort and security products, and wholesale distribution through ADI Global.
Resideo Technologies (NYSE: REZI) is a global manufacturer and distributor of home comfort, security, and automation products. It was spun off from Honeywell in 2018, inheriting Honeywell’s Home and ADI Global Distribution businesses. Resideo’s Products & Solutions segment supplies thermostats (under the Honeywell Home brand), smoke/carbon detectors (First Alert/BRK), security sensors, water leak detectors, and related services. Its ADI Global Distribution segment is a leading wholesale distributor of security and low-voltage products to professional installers. In mid-2024, Resideo acquired Snap One (Control4, Triad, etc.) for approximately $1.4 billion, adding smart living solutions to its portfolio and expanding the ADI distribution offerings.
Resideo reported strong Q1 2025 results, surpassing consensus estimates and management’s guidance on both revenue and earnings. Total revenue came in at $1.77 billion, up approximately 19% year-over-year and above the expected $1.72 billion, driven by the Snap One acquisition and increased demand for new products such as HVAC thermostats and alarms. Adjusted EBITDA rose 23% YoY to $168 million, with gross margins improving to 41.4% in the Products segment and 21.6% in ADI, reflecting segment-wise margin expansions of 190 basis points and 360 basis points, respectively. Adjusted EPS stood at $0.63, more than double the consensus forecast of $0.28, representing a 125% earnings surprise. Despite cash usage of $65 million in the quarter, Resideo maintained a solid liquidity position, backed by record free cash flow generation of $444 million in FY2024.
In Products & Solutions, Q1 revenue was $649M (+5% YoY, +6% organic) with a gross margin of 41.4% (up 1.9%). Volume grew on new Honeywell Home FocusPRO thermostats and BRK/First Alert alarms. Operating profit rose to $136M (21.0% of sales vs 18.1% year-ago). Notably, Resideo launched a connected First Alert smart smoke/CO alarm (compatible with Google Home) during Q1.
In ADI Global Distribution, Q1 revenue was $1,121 million (+29% YoY, +4% organic). The Snap One acquisition contributed $227 million of this, while the core ADI business grew modestly on higher volume. ADI’s gross margin was 21.6% (up 360 bp), and Adjusted EBITDA $72 million (6.4% margin). Management reports Snap One integration is ahead of schedule, with synergies ramping. Overall, both segments saw double-digit EBITDA growth and healthy margin improvement.
The demand environment for REZI is expected to be steady in 2025. Management has also reaffirmed its guidance for 2025 with continued mid-single-digit organic growth and the Snap One’s contribution. In the near term, the company plans further phased price increases to offset any tariffs or cost inflation. Over 98% of P&S product costs in Mexico are already tariff-exempt, and management expects to mitigate remaining tariff impacts through pricing actions. Furthermore, the Snap One unit continues to integrate into ADI, broadening the pro-audio/video portfolio. ADI’s e-commerce channel and exclusive brand lines are expanding rapidly (Q1 e-commerce +15% organic). Combined organic ADI sales grew approximately 7% (daily) in Q1, indicating strength ahead.
Resideo is also rolling out new offerings to capture demand. Its Honeywell Home FocusPRO thermostat line (launched late 2024) has driven HVAC distributor orders. The new First Alert smart alarm (Q1 2025) addresses the expiring Nest Protect platform. A continued cadence of product launches is planned, especially energy-saving thermostats (e.g., a new S200 smart model with ENERGY STAR).
Over the long term, Resideo should deliver sustained, profitable growth in the smart-home and building controls markets by leveraging its diversified business model, strong brand portfolio, and expanding product lineup. The company is well-positioned to benefit from structural tailwinds in connected home technologies, including increased adoption of IoT thermostats, security systems, smoke detectors, and water monitoring devices. With nearly half of U.S. households now embracing smart home devices, Resideo’s offerings in energy management, safety, air quality, and security provide a solid platform for growth. While primarily a hardware-centric business, recurring revenue streams are supported by its extensive professional installer network (ADI) and trusted Honeywell Home brand, further enhanced by Snap One’s subscription-based services such as smart video and home automation systems.