Resideo Technologies (REZI) Jefferies Mining and Industrials Conference 2025 summary

Business overview and recent performance

• Operates in two segments: ADI (commercial distribution) and P&S (residential products), both showing strong execution and market share gains despite a soft residential market.

• ADI achieved double-digit growth in Q2, while P&S saw high single-digit growth, driven by new product introductions and digital investments.

• Volume growth and pricing actions contributed to performance, with successful launches of FocusPRO thermostats and connected fire/smoke products.

• ADI services over 120,000 installers, leveraging digital experience improvements to capture share.

• Commercial low-voltage markets for ADI remain robust, less impacted by residential trends.

Strategic separation and IRA settlement

• The two segments have distinct business models, capital structures, and minimal operational integration, prompting a planned separation.

• A restrictive indemnification agreement (IRA) with Honeywell, costing $35M per quarter, previously limited strategic options.

• Settlement of the IRA was completed in August, financed by $1.2B in debt and $400M in cash, removing strategic constraints.

• The separation is expected to unlock value, allowing each business to operate independently and clarify market positioning.

• The process is targeted for completion in the second half of next year, with ongoing work on disentangling shared systems and legal entities.

Snap One acquisition and integration

• Snap One acquisition completed in June 2024, with integration progressing well and $75M in synergies targeted over three years.

• Synergies stem from cost savings, cross-selling Snap exclusive products to ADI customers, and real estate optimization.

• Exclusive branded products remain a portion of the mix, with a focus on filling market gaps and enhancing software solutions.