Resideo’s second quarter saw a positive market reaction as the company delivered results ahead of Wall Street expectations, driven by strong demand for new products and effective execution in both its ADI distribution and Products & Solutions segments. Management attributed the performance to higher volumes in commercial security, fire, and professional audio/video products, as well as robust sales of Honeywell Home FocusPRO thermostats and First Alert smoke detectors. CEO Jay Geldmacher highlighted, “Demand for our new products, including the Honeywell Home FocusPRO thermostats and First Alert connected detectors continues to be strong.”
Is now the time to buy REZI? Find out in our full research report (it’s free).
Resideo (REZI) Q2 CY2025 Highlights:
- Revenue: $1.94 billion vs analyst estimates of $1.83 billion (22.3% year-on-year growth, 6.1% beat)
- Adjusted EPS: $0.66 vs analyst estimates of $0.53 (24.5% beat)
- Adjusted EBITDA: $210 million vs analyst estimates of $179 million (10.8% margin, 17.3% beat)
- The company lifted its revenue guidance for the full year to $7.5 billion at the midpoint from $7.39 billion, a 1.6% increase
- Management raised its full-year Adjusted EPS guidance to $2.81 at the midpoint, a 19.6% increase
- EBITDA guidance for the full year is $865 million at the midpoint, above analyst estimates of $755.5 million
- Operating Margin: 9.1%, up from 7.7% in the same quarter last year
- Market Capitalization: $4.65 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Resideo’s Q2 Earnings Call
- Erik Woodring (Morgan Stanley) asked about the breakdown of ADI’s 10% organic growth and Snap One’s performance. President Rob Aarnes explained growth was split between tariff-related price increases and volume, noting Snap One’s business is currently flat but benefits from accelerated integration.
- Erik Woodring (Morgan Stanley) inquired about the dynamics with a large private label security customer and the evolving relationship with Google. President Tom Surran clarified that while there are headwinds, the Google partnership on new products remains strong and future collaboration is under discussion.
- Erik Woodring (Morgan Stanley) questioned the fate of the Control4 platform post-ADI spin-off. Aarnes confirmed the Control4 brand and its new X4 operating system will remain with ADI, emphasizing plans to rejuvenate the offering and maintain customer pull-through.
- Ian Zaffino (Oppenheimer) asked about the potential for further Products & Solutions margin expansion. Surran responded that margin improvement will come from new product introductions, increased factory efficiency, and favorable product mix, with a long-term target of 45–50% gross margin.
- Ian Zaffino (Oppenheimer) queried about tariff management and M&A strategy. Aarnes described successful supplier negotiations and effective inventory management for tariff mitigation, while both Aarnes and CEO Jay Geldmacher affirmed M&A remains a strategic priority for both business segments.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely track (1) the launch and adoption rates of upcoming products in air, comfort, security, and water segments, (2) the realization of anticipated margin gains following the Honeywell indemnification agreement termination, and (3) progress toward the planned spin-off of the ADI business. Additional focus will be on how effectively Resideo manages tariff risks and navigates shifting demand in key end markets.
Resideo currently trades at $31.28, up from $26.26 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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