Resideo Technologies reported third‑quarter 2025 revenue of $1.864 billion, a 2% year‑over‑year increase that fell short of the consensus estimate of $1.877 billion. The modest growth reflects a mix of steady demand in the Products & Solutions segment and a 1% favorable impact from foreign‑currency gains in the ADI Global Distribution segment, while the residential HVAC market remained soft, dampening growth in the Air product line.
Adjusted earnings per share rose to $0.89, beating the consensus estimate of $0.72 by $0.17 or 23.6%. The beat was driven by disciplined cost management and a favorable product mix that shifted toward higher‑margin smart‑home devices. Operating income of $154 million was largely supported by the $140 million contribution from Products & Solutions and $56 million from ADI, with the latter offset by a one‑time $1.59 billion payment to Honeywell that was excluded from operating metrics.
Gross profit margin expanded to 29.8%, up 110 basis points from the prior year, the highest level in the company’s history. The margin lift was largely attributable to pricing power in the smart‑home segment and efficient cost control in manufacturing, while the softer HVAC market exerted limited pressure on overall profitability.
Management reiterated its plan to spin off the ADI Global Distribution business by the second half of 2026, a move intended to unlock shareholder value and sharpen focus on the higher‑margin Products & Solutions portfolio. CEO Jay Geldmacher noted that the separation would allow the company to “focus on the core product portfolio and pursue double‑digit operating margins over the next 3‑5 years.”
Guidance for the fourth quarter was raised to a net revenue range of $1.853 billion to $1.893 billion and adjusted EBITDA of $211 million to $225 million, while full‑year 2025 revenue guidance was increased to $7.430 billion to $7.470 billion and adjusted EBITDA to $818 million to $832 million. The upward revision reflects confidence in continued demand for connected‑home solutions and the expected benefits of the upcoming spin‑off.
Market reaction to the results was tempered by the revenue miss; investors focused on the slight shortfall relative to estimates and the modest growth pace, despite the strong EPS beat. The company’s guidance signals confidence in future performance, but the headwinds from a soft residential HVAC market and ongoing ERP implementation at ADI remain concerns for the near term.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.