Q2 2026 Resideo Technologies Inc Earnings Call Transcript
Key Points
- Resideo Technologies Inc (REZI) exceeded the high end of its second quarter outlook for all metrics, with total revenue growing 2% year-over-year to a record $2 billion and adjusted EBITDA up 19% to a record $249 million.
- The Products & Solutions segment achieved its 13th consecutive quarter of year-over-year gross margin expansion, with gross margin up 70 basis points to 43.6%, driven by volume increases and favorable manufacturing variances.
- Strong adoption of new products, including combination smoke/CO detectors, the Honeywell Home Elite Pro thermostat, and new dehumidification/water filtration products, is driving revenue growth across retail, HVAC distribution, and other channels.
- The company successfully completed the ADI Global Distribution spin-off, positioning Resideo Technologies Inc (REZI) as a pure-play building technologies company with a focus on higher-margin branded products.
- Resideo Technologies Inc (REZI) initiated standalone 2026 guidance with revenue of $2.9-$2.95 billion and adjusted EBITDA of $605-$625 million, reflecting confidence in its growth strategy and new product launches in the second half of 2026.
- The company is executing strategic operational optimization initiatives, including manufacturing footprint reviews and product platform consolidation, which are expected to drive long-term efficiency and margin improvements.
- Resideo Technologies Inc (REZI) faces a significant headwind from a large OEM security customer that is pursuing vertical integration, expected to reduce revenue by $40-$50 million in the second half of 2026.
- Inflationary input costs, including memory, metals, printed circuit boards, and semiconductors, are rising faster than expected, creating a slight gross margin headwind in the second half of 2026 despite price increases.
- The residential macroeconomic environment remains persistently soft, with muted housing trends and no expected improvement in new home construction or existing home sales, limiting market-driven growth.
- The company anticipates no material tariff refunds for the remainder of 2026, which could negatively impact profitability compared to the second quarter's $27 million benefit.
- Operating expenses increased due to higher legal settlement costs, and the company expects a step-function impact on gross margins in Q3 as input costs rise before pricing fully offsets them.
- The standalone outlook for 2026 excludes adjusted EPS and cash flow guidance until the post-closing cash adjustment with ADI is completed, creating uncertainty for investors.
Hello, everyone. Thank you for joining us, and welcome to the Resideo second quarter 2026 earnings conference call. (Operator Instructions)
I will now hand the conference over to Chris Lee, Global Head of Strategic Finance. Please go ahead.
Thank you, and good afternoon, everyone. Thank you for joining us for Resideo's second quarter 2026 earnings call. Joining me on today's call is Tom Surran, Resideo's Chief Executive Officer. We would like to remind you that this afternoon's call contains forward-looking statements. Statements other than historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties.
Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Resideo's filings with the Securities and Exchange Commission. The company
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