Resideo Technologies (REZI) Q3 2024 earnings summary

Executive summary

• Net revenue grew 18% year-over-year to $1.83 billion, with mid-single-digit organic growth in both Products & Solutions and ADI, marking the first quarter since Q2 2022 with year-over-year organic growth in both segments.

• Adjusted EBITDA reached $190 million, up 29% year-over-year, exceeding guidance.

• Snap One integration progressed well, contributing to ADI's growth and targeting $12 million in 2024 synergies.

• CEO announced intention to retire in 2025, with succession planning underway.

• Strong demand for new product launches, including Honeywell Home Focus Pro thermostats, supported results.

Financial highlights

• Net revenue: $1.83 billion, up 18% year-over-year; Products & Solutions revenue $645 million (down 1%, up 4% excluding Genesis divestiture); ADI revenue $1.18 billion (up 31%, up 4% excluding Snap One acquisition).

• Adjusted EBITDA: $190 million, up 29% year-over-year; Adjusted EPS: $0.58, up from $0.55 in Q3 2023; GAAP EPS: $0.07, down from $0.14.

• Operating cash flow was $147 million, up from $60 million in Q3 2023.

• Gross margin expanded by 190 bps to 28.7% year-over-year.

• Cash and cash equivalents stood at $531 million as of September 28, 2024; total debt $1.99 billion.

Outlook and guidance

• Q4 2024 net revenue expected between $1.815–$1.855 billion; adjusted EBITDA $170–$185 million; adjusted EPS $0.51–$0.61.

• Full-year 2024 net revenue guidance $6.72–$6.76 billion; adjusted EBITDA $672–$687 million; adjusted EPS $2.18–$2.28; operating cash flow at least $375 million.

• Management expects positive business momentum to continue into 2025.