Resideo Technologies (REZI) 2026 Baird Global Consumer, Technology & Services Conference summary

Business overview and segment details

• Company operates two segments: P&S (product manufacturing for residential systems) and ADI (distribution of low voltage and security products, mainly commercial).

• P&S focuses on residential sensing and control, with a $2.8B revenue and low 40% gross margin; ADI is a $1.2B Q1 business with over 20% gross margin.

• Both segments support over 100,000 professional customers and have strong distribution networks.

• ADI includes proprietary and third-party products, with a significant omni-channel presence.

• P&S holds leading market share in several product categories and targets a $40B addressable market.

Strategic separation and capital structure

• Company is splitting into two standalone businesses due to differing capital and governance needs.

• Legacy Honeywell liabilities previously prevented separation; these were settled last year, enabling the split.

• ADI will raise $1B in debt, with $900M transferred to P&S (RemainCo) to delever; both aim to optimize leverage post-spin.

• Investor Days are planned for July, with the spin expected between mid-Q3 and mid-Q4.

• No major M&A expected during the spin; future bolt-on acquisitions possible for both segments.

Market dynamics and growth drivers

• ADI’s growth is driven by commercial security demand, technology innovation, and omni-channel expansion.

• Residential AV (Snap One) is more discretionary and has faced recent headwinds due to housing market softness.

• P&S revenue is 80% residential, with non-discretionary products supported by regulatory and replacement cycles.

• P&S outperformed market expectations by focusing on differentiated, high-margin products and innovation.

• Both segments expect margin expansion through operational efficiencies, exclusive brands, and footprint rationalization.