Resideo’s first quarter was marked by solid revenue growth, surpassing Wall Street’s expectations, yet was met with a negative market reaction. Management attributed this disconnect to higher freight and fuel costs, as well as persistent softness in the high-end residential AV market. CEO Jay Geldmacher emphasized, “We have largely absorbed cost inflation, primarily related to higher costs for freight in our reported first quarter results.” The Products & Solutions segment saw healthy demand across most channels, particularly in safety and thermostat products, while the ADI segment’s distribution business faced margin headwinds from rising operating expenses and inventory adjustments.
Is now the time to buy REZI? Find out in our full research report (it’s free for active Edge members).
Resideo (REZI) Q1 CY2026 Highlights:
- Revenue: $1.91 billion vs analyst estimates of $1.88 billion (8% year-on-year growth, 1.8% beat)
- Adjusted EPS: $0.65 vs analyst estimates of $0.61 (7.4% beat)
- Adjusted EBITDA: $153 million vs analyst estimates of $201 million (8% margin, 23.9% miss)
- The company reconfirmed its revenue guidance for the full year of $7.85 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $3.10 at the midpoint
- EBITDA guidance for the full year is $960 million at the midpoint, above analyst estimates of $939 million
- Operating Margin: 5.3%, down from 7.7% in the same quarter last year
- Market Capitalization: $4.28 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Resideo’s Q1 Earnings Call
- Dan Stratemeier (Jefferies) questioned the effectiveness and timing of price actions to mitigate macro cost pressures; CFO Michael Carlet expressed confidence in customer acceptance and the ability to offset costs, but acknowledged some lag in implementation.
- Dan Stratemeier (Jefferies) asked about the significance and timing of ADI’s business transformation; President Rob Aarnes detailed real estate rationalization and organizational changes, emphasizing opportunities for cost reduction and process optimization.
- Dan Stratemeier (Jefferies) probed growth initiatives in ADI’s core categories; Aarnes highlighted focused initiatives to return commercial categories to growth, noting past success and optimism for near-term improvement.
- Dan Stratemeier (Jefferies) prompted discussion on Products & Solutions outperformance relative to end markets; President Thomas Surran credited strong management, effective new product introductions, and proactive supply chain management for the segment’s above-market growth.
- Ian Zaffino (Oppenheimer) inquired about confidence in the second-half guide amid market softness; CEO Jay Geldmacher and team pointed to easier year-over-year comparisons, pricing actions, and ongoing cost initiatives as sources of confidence, but acknowledged persistent macro uncertainty.
Catalysts in Upcoming Quarters
In the coming quarters, our analyst team will be monitoring (1) the rollout and effectiveness of price increases in offsetting ongoing cost inflation, (2) execution and progress on ADI’s business transformation and the completion of the spin-off, and (3) demand recovery in core markets, particularly the high-end residential AV and HVAC channels. Continued supply chain stability and successful new product launches will also be important markers for Resideo’s ability to navigate macro and industry-specific headwinds.
Resideo currently trades at $28.62, down from $36.68 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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