Resideo Technologies, Inc. (REZI)

Item 1. Business.

General

As used herein, unless the context otherwise dictates, the term “Resideo”, the “Company”, “we”, “us”, or “our” means Resideo Technologies, Inc. and its consolidated subsidiaries. Our common stock began trading under the ticker symbol “REZI” on the New York Stock Exchange (“NYSE”) on October 29, 2018.

We separated from Honeywell International Inc. (“Honeywell”) in 2018, becoming an independent publicly traded company as a result of a pro rata distribution of our common stock to stockholders of Honeywell (the “Honeywell Spin-Off”).

Description of Business

We are a global manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions that help homeowners and businesses stay connected and in control of their comfort, security, energy use, and smart living. We are a leading player in key product markets including home heating, ventilation, and air conditioning controls; smoke and carbon monoxide detection home safety and fire suppression; and security. Our global footprint serves residential and commercial end-markets. Our solutions and services can be found in over 150 million residential and commercial spaces globally, with tens of millions of new devices sold annually.

We operate in large markets that sit at the intersection of multiple secular growth trends. We believe the increased desire for critical and cost-effective comfort, energy management, and actionable safety and security solutions in residential and commercial spaces, combined with the long-term impacts of energy transitions, are driving investment in the types of products and solutions we provide.

Our primary focus is on the professional channel where we are a trusted partner to approximately 100 thousand professional contractors, installers, dealers, and integrators in the HVAC, security, fire, electrical, connected home, and home comfort markets (“professionals”). Our global scale, breadth of product offerings, innovation heritage, and differentiated service and support has enabled our trusted relationship with professionals and has been a key driver of our success.

We manage our business operations through two business segments, Products and Solutions and ADI Global Distribution. On July 30, 2025, we announced our intention to separate the ADI Global Distribution segment through a tax-free spin-off to our shareholders (the “ADI Spin-Off”). Following the completion of the announced future ADI Spin-Off, the Products and Solutions segment would continue to operate as Resideo and ADI Global Distribution would become an independent public company.

Products and Solutions: Our products and solutions for comfort, energy management, safety, and security benefit from trusted, well-established branded offerings such as Braukmann, BRK, First Alert, Honeywell Home, Resideo, and others. Our offerings include temperature and humidity control, water and air solutions, smoke and carbon monoxide detection home safety products, residential and small business security products, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software. We also sell components to manufacturers of water heaters, heat pumps, and boilers. Through our whole home presence, we are an enabler of home connectivity with over 14 million connected customers. Our connected solutions harness data to provide control, visibility, insights, and alerts to the end user. Our comprehensive product suite has also allowed us to develop and sustain long-standing partnerships with professionals who have relied on our selection and availability of products and configured solutions to help them succeed and grow their businesses.

ADI Global Distribution: Our ADI Global Distribution segment is a leading, global specialty distributor of professionally installed low-voltage products, including security and audio-visual (“AV”) solutions, serving commercial and residential markets through an omnichannel go-to-market platform. ADI Global Distribution sells primarily to licensed professional installers, dealers, and integrators. We offer an expansive list of products from leading suppliers across key specialty low-voltage categories. ADI complements our third-party supplier products with a suite of exclusive brands and services offerings.

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Resideo Technologies, Inc.

Competition

Our industries and markets are highly competitive in both our Products and Solutions and ADI Global Distribution business segments, where we compete with global, national, regional, and local providers for our products, services and solutions, including manufacturers, distributors, service providers, retailers, and online commerce providers, as well as newer entrants to the market with non-traditional business and customer service models or disruptive technologies and products, including cable, telecommunications, and technology companies competing in the connected home space as well as smaller market entrants that offer control capabilities among their products, applications, and services and have ongoing development efforts to address the broader connected home market.

Factors influencing our competitive position in the industry include product and service innovation, our reputation and the reputation of our brands, sales and marketing programs, customer relationships, product performance, reliability and warranty, quality and breadth of product training and events, product availability, speed and accuracy of delivery, service and price, technical support, and credit availability.

Materials and Suppliers

Purchased materials used in our manufacture of products in Products and Solutions include copper, steel, aluminum, plastics, printed circuit boards (“PCB”), semiconductors, and passive electronics. Purchased materials cover a wide range of supplier value-add from raw materials and single components to subassemblies and complete finished goods, and there are considerable expenditures on both commercial off-the-shelf and make-to-print items. Although execution of material substitutions or supplier changes may be resource intensive and can cause delays and other inefficiencies, alternatives may exist in the event that a supplier becomes unable to provide material. With respect to our ADI Global Distribution business, we rely on key suppliers of branded products to deliver certain products for resale to our customers who may purchase based on job specifications or otherwise based on brand reputation. Both our third-party and exclusive brand suppliers may be impacted by raw material price fluctuations, the ability of key suppliers (or factories) to meet quality and delivery requirements, and catastrophic events can increase the cost and affect the supply of our products and services and impact our ability to meet commitments to customers. Tariffs, sanctions, and other barriers to trade could adversely affect our suppliers which could in turn negatively impact our material costs and operations.

Manufacturing

Our Products and Solutions business operates manufacturing and distribution facilities throughout the world, including sites in Mexico, the Czech Republic, Hungary, the United States (“U.S.”), Germany, the United Kingdom, Netherlands, and China. A significant percentage of our Products and Solutions revenue is derived from products manufactured in our own facilities, with the remainder being “buy to sell” (finished products purchased directly from other manufacturers) or sourced from third-party contract manufacturers. Major activities and competencies in our manufacturing operations include PCB assembly, injection molding, surface mount technologies, automatic and manual assembly and test, electrotechnical assembly and test, die casting and machining, calibration, and final test. We source raw materials and commodities, electronic components and assemblies, mechanical components, and assemblies from a wide range of third-party suppliers worldwide. With respect to our ADI Global Distribution business, we rely on third-party manufacturers to supply both third-party branded and exclusive branded products. A significant percentage of our exclusive branded products are sourced with manufacturers located in Asia.

Regulatory and Environmental Compliance and Regulatory Capital Expenditures

We are subject to various federal, state, local, and foreign government requirements relating to environmental health and safety protection standards and permitting, labeling, and other requirements regarding, among other things, electronic and wireless communications, air emissions, wastewater discharges, the use, handling, and disposal of hazardous or toxic materials, remediation of environmental contamination, data privacy and security, cybersecurity, telemarketing, email marketing, other forms of online advertising and consumer protection, licensing, working conditions for and compensation of our employees and others. Our business may also be affected by changes in governmental regulation of energy efficiency and conservation standards and product safety regulations. These and other laws and regulations impact the manner in which we conduct our business, and changes in legislation or government policies can affect our worldwide operations, both favorably and unfavorably. For a more detailed description of the various laws and regulations that affect our business, refer to Item 1A. Risk Factors.

Our efforts to comply with numerous federal, state, and local laws and regulations applicable to our business and products often results in capital expenditures. We make capital expenditures to design, maintain, and upgrade our products to

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Resideo Technologies, Inc.

comply with or exceed standards applicable to the industries in which they compete. Our ongoing environmental compliance programs also result in capital expenditures. As of December 31, 2025, we have recorded a liability for environmental investigation and remediation of approximately $22 million related to sites owned and operated by Resideo. Regulatory and environmental considerations are a part of all significant capital expenditure decisions; however, expenditures in 2025 related solely to regulatory compliance were not material. It is management’s opinion that the amount of any future capital expenditures related to compliance with any individual regulation or grouping of related regulations will not have a material adverse effect on our financial results or competitive position in any one year. Refer to Note 15. Commitments and Contingencies of the Notes to Consolidated Financial Statements.

Human Capital

As of December 31, 2025, we employed approximately 14,800 employees in 35 countries, of which about 4,100 employees were located in the U.S. and 6,400 in Mexico. Approximately 3% of Resideo’s U.S. employees and 7% non-U.S. employees are covered under collective bargaining agreements. We believe relations with our workforce are good.

Talent Acquisition, Management, and Development: We have a robust recruiting model to attract all levels of talent across the regions where we operate. Our model includes (1) attract, develop, and retain an inclusive workforce, (2) foster a winning culture, and (3) be identified as a company of choice by our customers and the communities we serve. We continue to assess the needs of the business and identify inclusive organizations to partner with that promote a pipeline of diverse talent. Our inclusive outreach includes contacting job boards and inclusive partnerships, such as Society of Women Engineers (“SWE”) and Direct Employers Association. We have eliminated degree requirements from the majority of our professional roles to increase the breadth of our applicant talent pool unless required by local legislation.

Internally, strategic talent reviews and succession planning occur on an annual basis, globally and across all business areas. In addition, we provide regular trainings to our people managers.

At Resideo, we are committed to employee growth and development and are proud to offer employees a wide range of opportunities. A key offering is LinkedIn Learning, enabling skills development through thousands of courses. In 2025 we introduced a monthly webinar (Empowering For Success) geared toward supporting our professional population with practical ways to support career development. Our employees also have access to a formal mentor program that connects team members with experienced professionals.

Additionally, our quarterly leadership development series (People Leadership Series), offers valuable insights from executive leaders and subject matter experts to reinforce our commitment to informed, inclusive and effective leaders across the organization.

We conduct three performance review discussions throughout the year and refer to them as the “Pulse.” We continue to leverage performance ratings as part of the final “Pulse” conversation. The purpose of the rating is to drive accountability, strengthen our succession planning process and establish “pay-for-performance” standards.

Our annual Employee Voice Survey allows each function in our Company to better understand engagement across the organization. Each sub-organization is tasked with creating an action plan based on feedback received to help increase engagement. We also hosted our first non-technical company-wide Hackathon to impact the employee experience. In 2025, we continued to support and evolve our six employee resource groups which are available to all employees: Women, LGBTQIA+, Black, Latino, Veterans, and People with Differing Abilities.

Forbes Recognition: In 2025, Resideo was recognized on three of Forbes’ 2026 corporate performance lists, reflecting the strength of our brand, the trust of our customers, and the commitment of our employees. Resideo was named one of America’s Most Trusted Companies, one of America’s Best Companies, and one of America’s Best-in-State Companies for Arizona.

Culture: We continue to reinforce our four Core Values:

•Start with the Customer: We understand our customers’ needs and pride ourselves on delivering exceptional experiences;

•Act as One Team: We work together toward common goals, engaging from a place of humility and respect;

•Pioneer the Future: We embrace change, boldly step into the unknown, and relentlessly foster innovation to fuel our growth; and

•Make a Difference: We care about the long-lasting, positive impact we make on each other, our customers, our communities, and the planet.

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Resideo Technologies, Inc.

Total Rewards: Our primary reward strategy is ensuring “pay-for-performance” on an annual basis, as well as over the long term, which drives a mindset of accountability and productivity. Our compensation guiding principles are to structure compensation that is simple, aligned and balanced. We structure and administer our rewards programs in a manner consistent with good governance practices. We believe that the interests of employees must be aligned with our stockholders. We provide comprehensive and competitive benefits that are designed to meet the varying needs of our employees and promote choice. Our package includes paid time off, flexible work schedules, education assistance programs and more.

These actions reinforce our culture that values employees and seeks to attract and retain the talent that we need to win in the market. We believe the combination of our competitive pay-for-performance compensation programs and our comprehensive benefit programs demonstrate our commitment to a compelling total rewards value proposition for our employees.

Health and Safety: In 2025, we reaffirmed our commitment to maintaining a safe and healthy workplace for all employees, advancing toward our goal of full certification across key international standards. We successfully achieved certification at 10 manufacturing locations for ISO 14001:2015 (Environmental Management Systems) and 8 locations for ISO 45001:2018 (Occupational Health and Safety Management Systems).

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-05-12 (period ending 2026-04-04).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following information should be read in conjunction with the Unaudited Consolidated Financial Statements included herein under “Item 1. Financial Statements.” and the Audited Consolidated Financial Statements and the notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) included in our 2025 Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions, and projections about our industries and our business and financial results. Forward-looking statements often include words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “continues,” “believes,” “may,” “will,” “goals,” and words and terms of similar substance in connection with discussions of future operating or financial performance. This Quarterly Report includes industry and market data that we obtained from various third-party sources, including forecasts based upon such data; as with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by us or on our behalf. Although we believe that the forward-looking statements contained in this Quarterly Report are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to:

•our ability to spin-off the ADI Global Distribution business, including the timeframe and process for the same and unexpected consequences of the ADI Spin-Off, including loss of customers;

•competition from other companies in our markets and segments, as well as in new markets and emerging markets;

•the potential adverse impacts of tariffs, import/export restrictions, or other trade barriers on global economic conditions, financial markets and our business;

•our ability to obtain additional future capital on favorable terms or at all;

•our ability to identify consumer preferences and industry standards, develop, and protect intellectual property related thereto, and successfully market new technologies, products, and services to consumers;

•our reliance on independent integrators to sell and install our solutions;

•our reliance on certain suppliers;

•the impact of disruptions in our supply chain from third-party suppliers and manufacturers, including our inability to obtain necessary raw materials and product components, production equipment, or replacement parts;

•inability to consummate acquisitions on satisfactory terms or to integrate such acquisitions effectively;

•the impact of earthquakes, hurricanes, fires, power outages, floods, pandemics, epidemics, natural disasters, and other catastrophic events or other public health emergencies;

•the impact of potentially volatile global market, geo-political and economic conditions and industry, and end market cyclicality, including factors such as interest rates, inflation, energy costs, availability of financing, consumer spending habits and preferences, housing market changes, and employment rates;

•failure to achieve and maintain a high level of product and service quality, including the impact of warranty claims, product recalls, and product liability actions that may be brought against us;

•our ability to retain or expand relationships with significant customers;

•the significant failure or inability to comply with specifications and manufacturing requirements or delays or other problems with existing or new products or inability to meet price requirements;

•inability to successfully execute restructuring or transformation programs or to effectively manage our workforce;

•the failure to increase productivity through sustainable operational improvements;

•the failure to acquire, implement, maintain and upgrade business technology infrastructure systems;

•economic, political, regulatory, foreign exchange, and other risks of international operations;

•our dependence upon information technology infrastructure and network operations having adequate cyber-security functionality;

•risks associated with our relationships with Honeywell, including our reliance on Honeywell for the Honeywell Home trademark;

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•failure to comply with the broad range of current and future standards, laws, and regulations in the jurisdictions in which we operate;

•the impact of potential material litigation matters, government proceedings, and other contingencies and uncertainties;

•our ability to borrow funds and access capital markets in light of the terms of our debt documents or otherwise;

•provisions in our governing documents discouraging takeovers;

•our ability to recruit and retain qualified personnel;

•uncertainty in the development, deployment, and the use of artificial intelligence in our products and services, as well as our business interests more broadly;

•currency exchange rate, stock price, and effective tax rate fluctuations;

•the CD&R Stockholder’s interest in and influence over us that may diverge from, or even conflict with, interests of the holders of our common stock, and the reduction in the relative voting power of holders of our common stock resulting from the issuance of preferred stock;

•our ability to maintain effective internal controls and deliver timely financial statements;

•impairment of goodwill, other intangible assets, and long-lived assets;

•being required to make significant cash contributions to our defined benefit pension plans;

•compatibility and ease of integration of our products and solutions with third-party products and services and our ability to control such third-party integrations;

•regulations and societal actions to respond to global climate change; and

•other risks detailed under the caption “Risk Factors” in this Quarterly Report, in Part II, Item 1A. Risk Factors, and certain factors discussed elsewhere in our 2025 Annual Report on Form 10-K and other filings we make with the SEC.

There have been no material changes to the risk factors described in our 2025 Annual Report on Form 10-K. These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Even if our results of operations, financial condition and liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.

Any forward-looking statements made by us in this Quarterly Report speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events, or otherwise.

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Overview and Business Trends

We manage our business operations through two business segments, Products and Solutions and ADI Global Distribution.

Our Products and Solutions segment offerings include temperature and humidity control, water and air solutions, smoke and carbon monoxide detection home safety products, residential and small business security products, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software. We also sell components to manufacturers of water heaters, heat pumps, and boilers. Our products and solutions for comfort, energy management, safety, and security benefit from trusted, well-established branded offerings such as Braukmann, BRK, First Alert, Honeywell Home, Resideo, and others.

Our ADI Global Distribution segment is a leading, global specialty distributor of professionally installed low-voltage products, including security and AV solutions, serving commercial and residential markets through an omnichannel go-to-market platform. ADI Global Distribution sells primarily to licensed professional installers, dealers, and integrators. We offer an expansive list of products from leading suppliers across key specialty low-voltage categories. ADI complements our third-party supplier products with a suite of exclusive brands and services offerings. On July 30, 2025, we announced our intention to separate the ADI Global Distribution segment through a tax-free spin-off to our shareholders. The ADI Spin-Off is expected to be completed in the second half of 2026, subject to certain conditions.

Our financial performance is influenced by macroeconomic factors underlying end user demand such as repair and remodeling activity, residential and commercial construction, new and existing home sales, employment rates, interest rates and bank lending standards, and supply chain dynamics that can be influenced by geopolitics. The ongoing uncertainty and volatility in the global macroeconomic and political environments have affected both supply and demand dynamics, and could continue to affect our visibility toward future performance. Uncertainties remain, including the global tariff environment, geopolitical relations between and among the U.S. and other countries, potential for changes in inflation and interest rates, increased labor costs, reduced consumer spending due to softening labor markets, elevated mortgage rates, shifts in energy policies, and potential market and other disruption from any of the above.

Current Period Highlights

•Net revenue of $1.91 billion, up 8.0% from $1.77 billion in the first quarter of 2025

•Gross profit margin of 28.8%, compared to 28.9% in the first quarter of 2025

•Income from operations of $102 million, or 5.3% of revenue, compared to $136 million, or 7.7% of revenue in the first quarter of 2025

•Fully diluted earnings per common share of $0.17, compared to diluted loss per common share of $0.02 in the first quarter of 2025

Outlook

For 2026, we anticipate executing our business operations against a highly dynamic global macroeconomic environment. The vast majority of costs associated with the building products that the Products and Solutions segment sells in the U.S. are incurred in Mexico. Most Products and Solutions products manufactured in Mexico, along with a significant portion of the ADI Global Distribution segment products sourced in Mexico, are currently exempt from tariffs under the United States-Mexico-Canada Agreement (“USMCA”) or specific commodity exceptions. While imported products that are not subject to the USMCA or other exceptions are subject to the tariff surcharge of 10% implemented on February 24, 2026 (until July 24, 2026) and in some instances, the metals tariffs ranging from 15-50% on the finished goods that were implemented on April 6, 2026, we do not expect a material impact to our business due to these tariffs. We are monitoring the litigation and recent ruling from the Court of International Trade (“CIT”) on the Section 122 tariffs for potential change

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in status. We will continue to take actions to address the cost impact of tariffs that affect our business; however, rising prices and other macroeconomics factors may lead to lower purchase levels by our customers. We are monitoring these dynamics closely and will adjust our business operations as appropriate. Also, we anticipate slow growth in the U.S. residential housing market and a moderation of growth in the non-residential construction market. Based on the aforementioned, our 2026 revenue outlook is growth in the mid-single-digits range year-over-year.

Results of Operations

The following table represents results of operations on a consolidated basis for the periods indicated:

	Three Months Ended
(in millions, except per share data and percentages)	April 4, 2026			March 29, 2025			$ change		% change
Net revenue	$	1,912		$	1,770		$	142	8.0	%
Cost of goods sold	1,361			1,259			102		8.1	%
Gross profit	551			511			40		7.8	%
Gross profit %	28.8		%	28.9		%			(10) bps
Operating expenses:
Research and development expenses	48			35			13		37.1	%
Selling, general and administrative expenses	340			306			34		11.1	%
Intangible asset amortization	31			30			1		3.3	%
Restructuring expenses	6			4			2		50.0	%
Business separation costs	24			—			24		N/A
Total operating expenses	449			375			74		19.7	%
Income from operations	102			136			(34)		(25.0)	%
Indemnification Agreement expense	—			90			(90)		N/A
Other expense (income), net	—			6			(6)		N/A
Interest expense, net	47			25			22		88.0	%
Net income before taxes	55			15			40		266.7	%
Provision for income taxes	17			9			8		88.9	%
Net income	38			6			32		533.3	%
Less: preferred stock dividends	9			9			—		N/A
Less: undistributed income allocated to preferred stockholders	3			—			3		N/A
Net income (loss) available to common stockholders	$	26		$	(3)		$	29	N/A
Earnings (loss) per common share:
Basic	$	0.17		$	(0.02)		$	0.19	N/A
Diluted	$	0.17		$	(0.02)		$	0.19	N/A
Weighted average common shares outstanding:
Basic	151			148
Diluted	155			148

N/A = Not applicable or not meaningful

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Net Revenue

Net revenue for the three months ended April 4, 2026 was $1,912 million, an increase of $142 million, or 8.0%, compared to the same period in 2025, primarily due to incremental sales days in the year-over-year reporting period, and includes $90 million of revenue from favorable price and mix shift, favorable foreign currency exchange rates of $30 million, and higher sales volume of $27 million.

Gross Profit

The chart below presents the drivers of the gross profit variance from the three months ended March 29, 2025 to the three months ended April 4, 2026.

Gross profit for the three months ended April 4, 2026 was $551 million, an increase of $40 million, or 7.8%, compared to the same period in 2025, as shown in the above waterfall.

Gross margin rate for the three months ended April 4, 2026 was 28.8%, a decrease of 10 basis points (“bps”), compared to the same period in 2025. The decrease was primarily driven by lower margins on new sales volumes of 30 bps and was partially offset by net favorable price and mix shift of 20 bps.

Research and Development Expenses

Research and development expenses for the three months ended April 4, 2026 were $48 million, an increase of $13 million, or 37.1%, compared to the same period in 2025. The increase was driven by $9 million in the Products and Solutions segment and $4 million in the ADI Global Distribution segment related to incremental headcount and third-party services to develop and introduce new products into the market.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended April 4, 2026 were $340 million, an increase of $34 million, or 11.1%, compared to the same period in 2025. The increase was primarily driven by certain legal settlements of $19 million and an increase in operating costs including people costs, rent, and third-party spend primarily due to the incremental days in the year-over-year reporting period.

Intangible Asset Amortization

Intangible asset amortization for the three months ended April 4, 2026 was $31 million, an increase of $1 million, or 3.3%, compared with the same period in 2025.

Restructuring Expenses

Restructuring expenses for the three months ended April 4, 2026 were $6 million, an increase of $2 million, compared to the same period in 2025. The increase was primarily driven by employee termination costs related to our ongoing transformation initiatives, including changes to our global manufacturing footprint and workforce alignment.

Business Separation Costs

Business separation costs for the three months ended April 4, 2026 were $24 million. These expenditures are one‑time in nature and included third‑party advisory, consulting, legal, and other incremental separation‑related costs incurred in connection with the announced future ADI Spin-Off.

Indemnification Agreement Expense

We incurred no Indemnification Agreement expense for the three months ended April 4, 2026, a decrease of $90 million compared to the same period of 2025. The decrease was driven by the termination of the Indemnification Agreement with Honeywell on July 30, 2025.

Other Expense (Income), Net

Other expense, net for the three months ended April 4, 2026 were immaterial, a decrease of $6 million, compared to the same period in 2025. The decrease was primarily attributable to favorable impacts from foreign currency exchange rates of $4 million, and final settlement related to the previous sale of the Resideo Grid Services business resulting in $1 million of incremental gain.

Interest Expense, Net

Interest expense, net for the three months ended April 4, 2026 was $47 million, an increase of $22 million, or 88.0%, compared to the same period in 2025. The increase was driven by an approximately $1.2 billion increase in outstanding debt related to the settlement of the Indemnification Agreement, resulting in $23 million of higher interest expense.

Tax Expense

Income tax expense for the three months ended April 4, 2026 was $17 million, an increase of $8 million or 89%, compared to the same period in 2025. The increase was primarily driven by an increase in income before taxes for the quarter, partially offset by a decrease in the effective tax rate.

The effective income tax rate decreased from 60.0% to 30.9%, primarily driven by the mix of earnings across the jurisdictions in which we operate, increased income before taxes with relatively fixed non-deductible expenses and the elimination of the non-deductible Indemnification Agreement expense.

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Segment Results of Operations

Products and Solutions

The chart below presents net revenue and income from operations for the three months ended April 4, 2026 and March 29, 2025.

Products and Solutions net revenue for the three months ended April 4, 2026 was $706 million, an increase of $57 million, or 8.8%, compared to the same period in 2025. The increase is primarily driven by incremental sales days in the year-over-year reporting period, and includes a $47 million favorable impact from price and mix shift, and favorable foreign currency exchange rates of $15 million. The increase was partially offset by lower sales volumes of $6 million due primarily to the pre-tariff orders resulting in higher sales volumes in the prior period.

Products and Solutions income from operations for the three months ended April 4, 2026 was $128 million, a decrease of $8 million, or 5.9%, compared to the same period in 2025. The decrease is primarily driven by approximately $18 million of certain one-time legal settlements, higher restructuring costs of $7 million, and lower sales volumes of $6 million. The decrease was partially offset by $22 million from favorable price and mix shift.

ADI Global Distribution

The chart below presents net revenue and income from operations for the three months ended April 4, 2026 and March 29, 2025.

ADI Global Distribution net revenue for the three months ended April 4, 2026, was $1,206 million, an increase of $85 million, or 7.6%, compared to the same period in 2025. The increase was primarily driven by $43 million from favorable price and mix shift, higher sales volumes of $32 million, and favorable foreign currency exchange rates of $15 million.

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ADI Global Distribution income from operations remained consistent at $34 million for the three months ended April 4, 2026 and March 29, 2025. The favorable impacts from price and mix shift of $9 million, increase in sales volumes of $7 million, and lower restructuring costs of $4 million, were offset by an increase in selling, general and administrative expenses of $13 million primarily due to the incremental days in the year-over-year reporting period, higher freight and duty costs of $4 million, and higher research and development costs of $4 million.

Corporate

Corporate costs for the three months ended April 4, 2026 were $60 million, an increase of $26 million, or 76.5%, compared to the same period in 2025. The increase was primarily driven by business separation costs of $24 million incurred in connection with the announced future ADI Spin-Off and included third‑party advisory, consulting, legal, and other incremental separation‑related costs.

Liquidity and Capital Resources

As of April 4, 2026, total cash and cash equivalents were $438 million, of which 50% were held by foreign subsidiaries. Our liquidity is primarily dependent on our ability to continue to generate positive cash flows from operations, supplemented by external sources of capital as needed. Additional liquidity may also be provided through access to the capital markets and our senior secured revolving credit facility in an aggregate principal amount of $500 million.

Liquidity

Our future capital requirements will depend on many factors, including acquisition or strategic transactions we may enter into such as the announced future ADI Spin-Off, the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies, and the expansion of our sales and marketing activities. While we may elect to seek additional funding at any time, we believe our existing cash, cash equivalents, and availability under our credit facilities are sufficient to meet our capital requirements for the foreseeable future.

We may from time to time take steps to reduce our debt or otherwise improve our financial position. These actions could include prepayments, open market debt repurchases, negotiated repurchases, other redemptions or retirements of outstanding debt, opportunistic refinancing of debt, raising additional capital, or divesting certain assets. The amount of prepayments or the amount of debt that may be refinanced, repurchased, or otherwise retired, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.

A&R Credit Agreement and Senior Notes

As of April 4, 2026, we had $3,226 million of long-term debt, including $2,326 million outstanding under our A&R Credit Agreement, $300 million 4.000% Senior Notes due 2029, and $600 million 6.500% Senior Notes due 2032. We have $18 million in outstanding debt due in the next twelve months, and $43 million of unamortized deferred financing costs. The Senior Notes due 2029 and Senior Notes due 2032 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries and rank equally with all of Resideo’s senior unsecured debt.

We have also entered into certain interest rate swaps based on Term SOFR. These interest rate swaps effectively convert a portion of our variable-rate debt to fixed rate debt.

As of April 4, 2026, we were in compliance with all covenants related to the A&R Credit Agreement, Senior Notes due 2029, and Senior Notes due 2032.

Refer to Note 11. Long-Term Debt and Note 12. Fair Value of the Notes to the Unaudited Consolidated Financial Statements for a description of our debt obligations and the timing of future principal and interest payments, including impacts from our interest rate derivatives.

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Common Share Repurchase Program

In August 2023, we announced that our Board of Directors authorized a share repurchase program for the repurchase of up to $150 million of our common stock over an unlimited time period. During the three months ended April 4, 2026, there were no common share repurchases. As of April 4, 2026, we had $108 million of authorized repurchases remaining under the Share Repurchase Program.

Cash Flow Summary for the Three Months Ended April 4, 2026 and March 29, 2025

Our cash flows from operating, investing, and financing activities for the three months ended April 4, 2026 and March 29, 2025, as reflected on the Unaudited Consolidated Financial Statements, are summarized as follows:

	Three Months Ended
(in millions)	April 4, 2026		March 29, 2025		$ change
Cash provided by (used for):
Operating activities	$	(145)	$	(65)	$	(80)
Investing activities	(36)		(31)		(5)
Financing activities	(42)		(22)		(20)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	1		3		(2)
Net decrease in cash, cash equivalents and restricted cash	$	(222)	$	(115)	$	(107)

Net cash used for operating activities for the three months ended April 4, 2026 was $145 million, compared to a $65 million use of cash for operations in the same period in 2025. The $80 million increase in the use of cash in the current period was primarily driven by $29 million higher use of cash in accounts receivable associated with the higher sales, $23 million higher use of cash associated with inventory build, $15 million cash payments for business separation activities in the current period, and a $54 million prior year source of cash associated with expenses incurred under the Indemnification Agreement, partially offset by a $32 million increase in current period net income.

Net cash used for investing activities for the three months ended April 4, 2026 was $36 million, compared to a $31 million use of cash for investing activities in the same period in 2025. The greater use of cash in the current period was due to a $5 million increase in capital expenditures in 2026 to enhance our operations.

Net cash used for financing activities for the three months ended April 4, 2026 was $42 million, compared to a $22 million use of cash for financing activities in the same period in 2025. The greater use of cash in the current period was driven primarily by a $17 million increase in cash used to acquire treasury stock in connection with stock award withholdings and a $5 million increase in long-term debt repayments in 2026.

Contractual Obligations and Probable Liability Payments

In addition to our long-term debt discussed above, our material cash requirements include the following contractual obligations.

Environmental Liability

We make environmental liability payments for sites which we own and operate. As of April 4, 2026, a liability of $22 million was deemed probable and reasonably estimable.

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Operating Leases

We have operating lease arrangements for the majority of our branches, distribution centers, manufacturing sites, offices, engineering, lab, storage sites, automobiles, and certain equipment. As of April 4, 2026, we had operating lease payment obligations of $333 million, with $57 million payable within 12 months.

Other Matters

Litigation, Environmental Matters, and the Indemnification Agreement

Refer to Note 14. Commitments and Contingencies for further discussion.

Recent Accounting Pronouncements

Refer to Note 2. Summary of Significant Accounting Policies for further discussion.

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Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Next expected filings

~2026-08-05 10-Q expected by 2026-08-09 (in 51 days)
~2026-11-05 10-Q expected by 2026-11-09 (in 143 days)
~2027-02-23 10-K expected by 2027-03-02 (in 253 days)
~2027-05-12 10-Q expected by 2027-05-16 (in 331 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-06-04 8-K Material Agreement Entered; Material Financial Obligation; Officer/Director Change; Financial Statements and Exhibits
2026-05-12 8-K Earnings Release; Financial Statements and Exhibits
2026-05-12 10-Q Quarterly Report
2026-05-11 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
2026-04-22 DEF 14A Proxy Statement
2026-02-24 10-K Annual Report
2026-02-24 8-K Earnings Release; Financial Statements and Exhibits
2026-01-07 8-K Officer/Director Change
2025-11-05 10-Q Quarterly Report
2025-11-05 8-K Earnings Release; Financial Statements and Exhibits
2025-08-14 8-K Material Agreement Entered; Material Agreement Terminated; Material Financial Obligation; Regulation FD Disclosure; Financial Statements and Exhibits
2025-08-05 10-Q Quarterly Report
2025-08-05 8-K Earnings Release; Shareholder Vote Results; Financial Statements and Exhibits
2025-07-30 8-K Material Agreement Entered; Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
2025-07-22 8-K Officer/Director Change

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