Resideo Technologies (REZI) Q2 2026 Earnings Report

The call conveyed a generally positive operational and financial performance with record quarterly revenue, strong adjusted EBITDA and EPS growth, continued P&S margin expansion and successful product adoption. Management also took strategic balance-sheet actions (ADI spin-off, $900M debt paydown) and reiterated a constructive product pipeline and stand-alone outlook for 2026. Offsetting risks include a meaningful near-term cash flow decline driven by separation and settlement costs, elevated input-cost inflation with expected H2 margin pressure (particularly Q3), the loss of volume from a large OEM security customer (estimated $40M–$50M revenue impact in H2), and the absence of further material tariff refunds. On balance, the positive results, clear execution on product launches and deleveraging actions outweigh the manageable near-term headwinds, supporting a favorable long-term view.

Resideo provided stand‑alone 2026 guidance of revenue $2.90–$2.95 billion and adjusted EBITDA $605–$625 million, and a Q3 2026 outlook of revenue $705–$730 million and adjusted EBITDA $145–$155 million; the outlook assumes ~ $175 million of full‑year sales to ADI and ~ $80 million of full‑year corporate costs allocated, with adjusted EPS and cash‑from‑operations guidance deferred pending the post‑closing cash adjustment and ADI to be presented as discontinued operations starting in Q3. For context, Resideo beat Q2 with consolidated revenue up 2% y/y to just under $2.0 billion, total adjusted EBITDA up 19% y/y to $249 million (which included ~$27 million of tariff refunds) and adjusted EPS up 26% y/y to $0.83; Products & Solutions revenue grew 4% y/y, gross margin was 43.6% (up 70 bps y/y and 100 bps sequentially), P&S adjusted EBITDA rose 6% y/y, and R&D remains ~5% of segmented revenue. Management expects H2 headwinds from input‑cost inflation and a $40–$50 million reduction in second‑half revenue from a large OEM security customer, does not expect material tariff refunds for the rest of 2026, and noted Q2 operating cash of $148 million (vs. $200 million prior year) driven by ~$45 million of separation payments and ~$20 million higher cash interest; Resideo also repaid $900 million of Term Loan B principal on August 3 and anticipates an additional ~$200 million repayment in Q3.