Resideo Technologies (REZI) Q4 2023 earnings summary

Executive summary

• FY23 revenue was $6.242B, down 2% YoY; adjusted EBITDA was $552M, down 13%, while operating cash flow rose 189% to $440M.

• Q4 revenue was $1.537B, down 1% YoY; operating income rose to $147M from $98M, and adjusted EBITDA was $136M versus $122M.

• Execution improved in H2 as transformation efforts began to show in results; Q4 pricing largely offset volume pressure.

Financial highlights

• FY23 GAAP net income was $210M versus $283M; diluted EPS was $1.42 versus $1.90, and adjusted diluted EPS was $1.58 versus $1.99.

• Q4 GAAP net income was $82M versus $39M; diluted EPS was $0.56 versus $0.26, and adjusted diluted EPS was $0.48 versus $0.25.

• Consolidated gross margin was 27.2% for FY23, down 50 bps, and 27.5% in Q4, down 10 bps YoY.

• FY23 operating income was $547M; it included $42M of restructuring charges versus $35M in 2022. Q4 2022 included $35M of restructuring charges.

• Adjusted EBITDA margin was 8.8% for FY23 versus 10.0% in FY22, and 8.8% in Q4 versus 7.8% in Q4 2022.

Outlook and guidance

• Q1 2024 outlook: revenue $1.460B–$1.510B, adjusted EBITDA $120M–$140M, and non-GAAP EPS $0.28–$0.38.

• FY24 outlook: revenue $6.080B–$6.280B, adjusted EBITDA $560M–$640M, non-GAAP EPS $1.48–$1.88, and operating cash flow of at least $320M.

• FY24 segment revenue outlook: ADI growth of 0%–3% and Products and Solutions decline of 6%–2%; includes $140M in annual cash payments under the Honeywell agreement.