Executive Summary

Q1 2025 was a clean beat across key metrics: revenue $1.77B (+19% YoY), adjusted EPS $0.63 (above high-end of outlook), and adjusted EBITDA $168M (+23% YoY), with total gross margin expanding 200 bps to 28.9% .
Strength was broad-based: Products & Solutions delivered its eighth straight quarter of YoY gross margin expansion (41.4%) on new product momentum; ADI grew reported revenue 29% (4% organic) with e-commerce +15% and Exclusive Brands +26% organically .
Management reaffirmed full-year 2025 guidance and introduced Q2 2025 ranges, citing tariff mitigation actions (pricing, supply chain moves) and Snap One integration ahead of plan as supports to profitability and narrative stability .
Key stock catalysts: durable gross margin trajectory, tariff mitigation reducing perceived risk, accelerating Snap synergies, and continued product cadence (FocusPRO thermostats, First Alert Smart Smoke & CO Alarm with Google Home) .

What Went Well and What Went Wrong

What Went Well

Products & Solutions gross margin rose to 41.4% (+190 bps YoY), marking the eighth consecutive quarter of expansion; operating income increased to $136M (21.0% margin) on new product adoption (FocusPRO thermostats, BRK safety products) .
ADI delivered reported revenue of $1,121M (+29% YoY), with organic ADS +7%, e-commerce +15% YoY, and Exclusive Brands +26% organically; Snap One integration is ahead of Year 2 synergy goals .
Management message on tariffs: “we believe Resideo will be able to essentially mitigate the cost impact of any tariffs,” backed by 98% USMCA-compliant Mexico sourcing for P&S and phased price increases across segments .

What Went Wrong

GAAP diluted EPS was a loss of $(0.02), driven by a $47M YoY increase in the Honeywell Reimbursement Agreement expense (accrual $90M, non-cash increase $55M in the quarter) despite cash payments remaining capped at $35M per quarter .
ADI operating income fell to $34M (3.0% margin) from $49M YoY, as higher SG&A/R&D (including Snap costs) offset margin gains; adjusted EBITDA margin ticked down to 6.4% (from 6.7%) .
Cash used in operations of $65M reflected seasonal working capital headwinds (higher receivables and early supplier payments for discounts), pressuring near-term cash metrics .

Financial Results

Key Metrics vs Prior Periods

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$1.828	$1.858	$1.770
Adjusted EBITDA ($USD Millions)	$190	$187	$168
Adjusted EPS ($USD)	$0.58	$0.59	$0.63
GAAP Diluted EPS ($USD)	$0.07	$0.08	$(0.02)
Total Gross Margin (%)	—	28.5%	28.9%

Q1 2025 vs Prior Year, Prior Quarter, and Estimates

Metric	Prior Year (Q1 2024)	Prior Quarter (Q4 2024)	Q1 2025 Actual	Consensus Estimate (S&P Global)	Beat/(Miss)	Surprise %
Revenue ($USD Billions)	$1.486	$1.858	$1.770	$1.736*	+$0.034B	+1.9%
Adjusted EPS ($USD)	$0.47	$0.59	$0.63	$0.254*	+$0.376	+148%
Adjusted EBITDA ($USD Millions)	$137	$187	$168	$157*	+$11M	+7.0%

Values with asterisk are retrieved from S&P Global.

Segment Breakdown

Segment	Metric	Q1 2024	Q1 2025
Products & Solutions	Revenue ($USD Millions)	$620	$649
	Gross Margin (%)	39.5%	41.4%
	Operating Income ($USD Millions)	$112	$136
	Adjusted EBITDA ($USD Millions)	$140	$158
	Adjusted EBITDA Margin (%)	22.6%	24.3%
ADI Global Distribution	Revenue ($USD Millions)	$866	$1,121
	Gross Margin (%)	18.0%? (not disclosed; GM implied by gross profit, see doc tables)	21.6%
	Operating Income ($USD Millions)	$49	$34
	Adjusted EBITDA ($USD Millions)	$58	$72
	Adjusted EBITDA Margin (%)	6.7%	6.4%

KPIs and Balance Sheet/Cash

KPI / Balance	Q1 2025
Cash used in operating activities ($USD Millions)	$(65)
Cash & equivalents ($USD Millions)	$577
Total debt ($USD Billions)	$2.02
ADI organic average daily sales growth	+7% YoY
ADI organic e-commerce revenue growth	+15% YoY
ADI Exclusive Brands sales growth (organic)	+26% YoY
Honeywell Reimbursement Agreement accrual increase (non-cash, $USD Millions)	$55
Depreciation & amortization (quarter, $USD Millions)	$47

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue ($USD Billions)	Q2 2025	—	$1.805 – $1.855	New
Adjusted EBITDA ($USD Millions)	Q2 2025	—	$175 – $195	New
Adjusted EPS ($USD)	Q2 2025	—	$0.51 – $0.61	New
Net Revenue ($USD Billions)	FY 2025	$7.285 – $7.485	$7.285 – $7.485	Maintained
Adjusted EBITDA ($USD Millions)	FY 2025	$725 – $805	$725 – $805	Maintained
Adjusted EPS ($USD)	FY 2025	$2.23 – $2.47	$2.23 – $2.47	Maintained
Cash Provided by Operations ($USD Millions)	FY 2025	$345 – $405	$345 – $405	Maintained
GAAP-to-Non-GAAP assumptions	FY 2025	—	D&A ~$199M; Interest ~$105M; SBC ~$61M	New detail

Management reaffirmed FY 2025 ranges and introduced Q2 2025 ranges, noting phased price increases at ADI (starting Q2) and P&S (2H25) to offset tariff impacts and maintain gross profit dollars .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/Macro	Mixed macro; early planning for potential tariffs	Cautious 2025 outlook; action plans to mitigate tariffs if implemented	Detailed mitigation plan; phased pricing; USMCA compliance (98% P&S Mexico goods)	Increasing clarity and mitigation confidence
Product cadence (Thermostats, Security)	FocusPRO orders; security portfolio refresh (VISTA)	Continued new product introductions; margin accretion	FocusPRO demand strong; First Alert Smart Smoke & CO Alarm with Google Home	Accelerating launches, retail rollout
E-commerce & Exclusive Brands	E-commerce +18%; Exclusive Brands +32%	Investments in omni-channel and Exclusive Brands continue	E-commerce +15%; Exclusive Brands +26% (organic)	Sustained structural margin accretion
Snap One integration/synergies	Integration progress, store-of-the-future pilot	Run-rate synergies ahead of plan; target ≥$75M exiting Year 3	Ahead of Year 2 synergy goals; cross-sell momentum	Execution ahead of plan
Regional trends (EMEA/OEM)	EMEA softness; OEM improving	OEM double-digit growth in EMEA; security softness	OEM growth continues; security declines moderating	Gradual improvement mix
Honeywell Reimbursement Agreement	Regular accruals; cash cap $140M/year	Higher accruals; GAAP EPS impact	Q1 accrual $90M; non-cash increase $55M; GAAP EPS pressured	Persistent GAAP headwind
Demand/linearity	Strong commercial momentum	Seasonality: higher 2H revenue	Minimal buy-ahead; healthy demand into April/May	Stable demand indicators

Management Commentary

CEO: “Resideo was at or above the high end of the range for all the metrics we provided for our quarterly financial outlook… Total adjusted earnings per share grew 34% year-over-year to $0.63.”
CEO on tariffs: “we believe Resideo will be able to essentially mitigate the cost impact of any tariffs” .
P&S President: “eighth consecutive quarter of year-over-year gross margin expansion… demand for our FocusPRO thermostat and BRK products” .
ADI President: “integration of Snap One continues to progress nicely, and we are ahead of our year 2 synergy goals… e-commerce structurally accretive” .
CFO: “we are reaffirming our 2025 outlook… phased price increases… goal is to essentially offset the tariff costs and maintain gross profit dollars” .

Q&A Highlights

Pricing/tariffs: Management will phase price increases at ADI and P&S to fully mitigate tariff impacts; sees prudent supplier actions and customer communication to preserve demand .
Demand sensitivity: Minimal evidence of buy-ahead or hesitancy; demand improved in commercial categories into April and early May, supporting outlook .
Consolidated price/mix: CFO noted top-line upside from pricing could be “relatively small” at P&S, more at ADI, phased through the year, with guidance held due to uncertainty .
Cycle view: P&S tied to housing turnover; existing home sales still depressed (~4M vs ~5M healthy) but broader remodeling and new home sales are supportive; content per new home is increasing .
Margin leverage: CFO expects ongoing gross margin accretion over the next few years driven by structural improvements and new products, without specific targets .

Estimates Context

Q1 2025 results beat Wall Street consensus across EPS, revenue, and adjusted EBITDA, with the largest surprise on EPS due to strong execution and gross margin expansion. See Financial Results table for detailed beats and surprise percentages. Values retrieved from S&P Global.*

Where estimates may need to adjust:

Raise EPS and EBITDA trajectories for FY 2025 to reflect better-than-expected Q1 and tariff mitigation plan; watch ADI pricing actions and P&S new product cadence potential for incremental top-line .

Key Takeaways for Investors

Gross margin expansion appears durable (28.9% total; P&S 41.4%) on structural efficiencies and accretive mix (e-commerce, Exclusive Brands), supporting multiple re-rating if sustained .
Tariff risk mitigated: 98% of P&S Mexico goods USMCA-compliant; phased pricing and supply chain actions aim to offset costs—reducing estimate volatility for 2025 .
Snap One integration is an upside lever: synergy capture ahead of plan, cross-selling broadening margins and revenue opportunities at ADI .
Near-term trading: Q2 guidance supports continuity; beats plus reaffirmed FY outlook are positive sentiment drivers; watch updates on tariff implementation cadence/pricing to gauge incremental tailwinds .
GAAP EPS will remain volatile due to Honeywell Reimbursement accruals despite cash caps; investors should anchor on adjusted EPS and cash generation trajectory .
2H seasonality expected to be stronger; align positioning for product launches (FocusPRO retail, First Alert smart alarm with Google Home) that can bolster volumes/mix .
Cash discipline intact; temporary Q1 working capital usage should normalize across the year per guidance for $345–$405M cash from operations .

RESIDEO TECHNOLOGIES, INC. (REZI)·Q1 2025 Earnings Summary