Executive Summary

Record quarter: net revenue $1.943B (+22% YoY), adjusted EBITDA $210M (+20% YoY), adjusted EPS $0.66; all exceeded the high end of outlook, while GAAP EPS was $(5.59) due to an $882M indemnification accrual tied to the Honeywell agreement .
Organic growth was robust: ADI +10% and Products & Solutions (P&S) +5%; P&S gross margin reached 42.9% (ninth consecutive YoY improvement) and total company gross margin expanded 120 bps to 29.3% .
Guidance raised materially for FY2025 and Q3 initiated: FY revenue $7.45–$7.55B, adjusted EBITDA $845–$885M, adjusted EPS $2.75–$2.87; Q3 revenue $1.85–$1.90B, adjusted EBITDA $220–$240M, adjusted EPS $0.70–$0.76 .
Strategic catalysts: signed agreement to terminate Honeywell indemnification via $1.59B payment (eliminates $140M annual cap and $35M quarterly payments) and intent to spin off ADI; management expects improved flexibility and accretive FCF/EPS as a result .

What Went Well and What Went Wrong

What Went Well
- Broad-based outperformance: revenue, adjusted EBITDA, and adjusted EPS all above guidance high-end; both segments delivered organic growth and margin expansion .
- P&S execution: 42.9% GM (+160 bps YoY), strong retail sell-through of new Honeywell Home FocusPRO thermostats and First Alert SC5 connected alarms; operating income up to $142M .
- ADI momentum: reported revenue $1.277B (+33% YoY), GM 22.2% (+280 bps), organic e-commerce +19%, Exclusive Brands +32% organic; Snap One integration ahead of plan .
What Went Wrong
- GAAP loss driven by Honeywell indemnification accrual ($882M) despite strong operating results; reported net loss $825M .
- Security channel softness within P&S and lingering macro/tariff uncertainty; HVAC saw refrigerant transition disturbances though management believes position improved .
- ADI SG&A/R&D up $70M YoY (Snap One inclusion and planned investments), modest margin headwind from competitive pricing environments in prior periods .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Billions)	$1.858	$1.770	$1.943
Gross Margin (%)	28.5%	28.9%	29.3%
Adjusted EBITDA ($USD Millions)	$187	$168	$210
GAAP Diluted EPS ($)	$0.08	$(0.02)	$(5.59)
Adjusted EPS ($)	$0.59	$0.63	$0.66

Segment Metric	Q4 2024	Q1 2025	Q2 2025
P&S Revenue ($USD Millions)	$669	$649	$666
P&S Gross Margin (%)	40.8%	41.4%	42.9%
P&S Operating Income ($USD Millions)	$133	$136	$142
ADI Revenue ($USD Millions)	$1,189	$1,121	$1,277
ADI Gross Margin (%)	N/A	21.6%	22.2%
ADI Operating Income ($USD Millions)	$48	$34	$71

KPIs	Q4 2024	Q1 2025	Q2 2025
ADI Organic e-commerce revenue growth (%)	22%	15%	19%
ADI Exclusive Brands organic growth (%)	34%	26%	32%
P&S Gross Margin (%)	40.8%	41.4%	42.9%

Q2 2025 Actual vs Consensus	Actual	Consensus	Delta
Revenue ($USD Billions)	$1.943	$1.823*	+$0.120
Adjusted EPS ($)	$0.66	$0.323*	+$0.337
Adjusted EBITDA vs EBITDA Consensus ($USD Millions)	$210	$179*	+$31

Values with asterisk (*) retrieved from S&P Global.

Notes: Company reports Adjusted EBITDA; S&P Global’s EBITDA consensus may reflect a different definition. GAAP net loss of $825M in Q2 reflects a non-cash accrual increase and expected termination payment under the Honeywell Indemnification Agreement .

Guidance Changes

Metric	Period	Previous Guidance (May 6, 2025)	Current Guidance (Aug 5, 2025)	Change
Net Revenue ($USD Billions)	FY 2025	$7.285–$7.485	$7.450–$7.550	Raised
Adjusted EBITDA ($USD Millions)	FY 2025	$725–$805	$845–$885	Raised
Adjusted EPS ($)	FY 2025	$2.23–$2.47	$2.75–$2.87	Raised
Cash from Operations ($USD Millions)	FY 2025	$345–$405	$405–$435	Raised
Net Revenue ($USD Billions)	Q3 2025	N/A	$1.850–$1.900	Initiated
Adjusted EBITDA ($USD Millions)	Q3 2025	N/A	$220–$240	Initiated
Adjusted EPS ($)	Q3 2025	N/A	$0.70–$0.76	Initiated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Tariffs/Macro	Cautious outlook; prepared playbook; competitive pricing pressures at ADI	Over 98% of P&S Mexico costs exempt; ability to mitigate tariffs	Tariff mitigation actions effective; price pass-through; USMCA exemptions maintained	Continued mitigation; stable plan
Snap One Integration	$17M run-rate synergies in 2024; strong exclusive brands roadmap	Progressing well; ahead of plan	Ahead of synergy goals; accretive; exclusive brands expansion	Strengthening
P&S Product Innovation	FocusPRO and VISTA launches; strong reception	First Alert Smart Smoke & CO alarm compatible with Google Home	New First Alert SC5 connected detector and thermostats strong retail sell-through	Building pipeline
P&S Margins	40.8% GM; structural efficiencies	41.4% GM; continued expansion	42.9% GM; 9th consecutive YoY improvement	Upward
Security Channel/ADT	Softness; better-than-anticipated sales with large customer	ADT impact better than expected	Security channel down YoY; ongoing engagement with large private label customer	Mixed
E-commerce & Exclusive Brands (ADI)	e-commerce +22%; Exclusive Brands +34%	e-commerce +15%; Exclusive Brands +26%	e-commerce +19%; Exclusive Brands +32% organic	Sustained growth
Strategic Actions	N/A	N/A	Agreement to terminate Honeywell indemnification; initiate ADI spin-off	Transformational

Management Commentary

“Resideo delivered exceptional results… net revenue and adjusted EBITDA were new record highs… adjusted EPS exceeded the high end of our outlook range.” – Jay Geldmacher, CEO .
“Total company adjusted EBITDA was a record $210M… going forward, we expect adjusted EBITDA to benefit from the removal of the $35M quarterly payment to Honeywell.” – Michael Carlet, CFO .
“The ADI team achieved 33% year over year growth… organic e-commerce net revenue grew 19%… exclusive brands revenue grew 32% year-over-year on an organic basis.” – Rob Aarnes, President ADI .
“P&S reported… the ninth consecutive quarter of year over year gross margin expansion… driven primarily by continued efficient utilization of our factories.” – Thomas Surran, President P&S .
“Agreement with Honeywell… a one-time cash payment of $1.59B… elimination of annual payments up to $140M through 2043… expected to be immediately accretive to adjusted EPS and free cash flow.” – Company release .

Q&A Highlights

ADI organic growth composition: ~2% price from tariffs pass-through; strength in commercial categories; Snap One holding flat vs ADI; pipeline and momentum remained strong into July .
Google partnership and security dynamics: SC5 co-developed with Google; strengthening relationship; security headwinds with large customer improving vs prior forecasts .
Control4 platform strategy: Stays with ADI post spin; x4 OS launched; opportunity to rejuvenate brand and drive pull-through .
P&S margin outlook: Management targets 45–50% longer term via NPI, manufacturing footprint improvements, and mix shift .
Tariff mitigation: Buying ahead inventory, negotiating supplier participation, dynamic pricing; fully mitigating impact across ADI .
M&A: Healthy pipeline at both segments; focus on ProAV and datacom adjacencies and technology opportunities .

Estimates Context

Q2 2025 beats vs S&P Global consensus: revenue $1.943B vs $1.823B*, adjusted EPS $0.66 vs $0.323*, adjusted EBITDA $210M (company) vs $179M*; beats driven by Snap One contribution, price realization, e-commerce and Exclusive Brands mix, and structural efficiencies in P&S .
Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

Operational momentum: Organic growth and margin expansion across both segments; durable e-commerce and Exclusive Brands tailwinds at ADI .
Material FY25 raise: Revenue, adjusted EBITDA, adjusted EPS, and CFO guidance increased; removal of Honeywell payments adds ~$35M benefit per quarter to adjusted EBITDA in H2 2025 .
Strategic simplification: Honeywell indemnification termination and planned ADI spin-off should enhance strategic and financial flexibility, a potential re-rating catalyst .
P&S margin trajectory: Ninth consecutive GM expansion to 42.9%; management targets 45–50% LT, supported by NPI and manufacturing optimization .
Watch security channel and tariff risks: Security channel remains mixed; management has robust tariff mitigation; macro/tariff headlines may drive near-term volatility .
Near-term setup: Q3 outlook implies continued strength; focus on delivery of ADI synergy capture and P&S product pipeline execution .
Medium-term thesis: Post-separation, each entity to present distinct profiles—ADI distribution growth with proprietary brands and omnichannel scale; P&S margin/FCF profile with connected home expansion .

RESIDEO TECHNOLOGIES, INC. (REZI)·Q2 2025 Earnings Summary