Question · Q3 2025
Neil Metellia requested a quantitative breakdown of the ERP implementation's impact on Q4, specifically how it contributes to the $40 million EBITDA guide down. He also asked for qualitative factors driving the positive 2026 outlook beyond the Honeywell indemnity and insights into ADI's project pipeline growth and potential secular trends in the security market.
Answer
CFO Michael Carlet estimated ERP costs were roughly split between Q3 and Q4, with revenue impact greater in Q3, and the $40 million EBITDA guide down driven by high single-digit millions in ERP costs and revenue impacts roughly equal across businesses. He noted 2026 growth would build on the $70 million Honeywell benefit, transitory impact recovery, and ongoing initiatives. President of ADI Global Distribution Business Rob Aarnes reported a record project pipeline in October, attributing it to execution and returning customers post-ERP, while maintaining expectations for low to mid-single-digit commercial security market growth.
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