REZI Q2 2024: Snap One integration drives $550M revenue, $65M EBITDA
- Accelerating Sales Momentum: Analysts noted a clear rebound from early project delays with accelerated daily sales averages throughout Q2 and strong growth from large accounts, which supports a positive outlook on order intake and revenue continuity.
- Successful Snap One Integration: The swift integration has already enabled cross-selling initiatives—such as launching products into over 100 branches and driving increased digital adoption—positioning the company to unlock additional revenue and margins.
- Robust New Product Pipeline: Management’s focus on accelerating new product introductions (NPI), particularly in high-margin segments like security and thermostats, promises future margin expansion and competitive differentiation.
- Residential market headwinds: The executives noted that higher interest rates and soft existing home sales continue to pose challenges, potentially limiting demand for Resideo’s products and services.
- Integration and product rationalization risks: The process to integrate Snap One raises concerns about execution risks, including challenges in cross-selling, merging cultures, and rationalizing potentially overlapping product portfolios.
- Regional inventory and supply chain issues: While North American HVAC inventory levels have normalized, EMEA inventory remains a concern and is not expected to improve until mid‑2025, which could negatively impact margins and growth in that region.
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Snap Integration
Q: Where do you begin integration?
A: Management explained that the first step is integrating the cultures and leadership—adding key Snap One executives and rapidly launching cross-selling initiatives across over 100 branches to set the stage for synergies. -
Snap Growth
Q: What’s Snap One’s revenue outlook?
A: The guidance includes about $550M of revenue and $65M of adjusted EBITDA from Snap One, indicating stability as the business begins to show its improved performance. -
Product Mix
Q: What’s the post-deal product mix?
A: The combined business now features nearly 20% proprietary products, with management actively reviewing third-party brands for rationalization to strengthen margins. -
PMS Outlook
Q: How is the PMS business performing?
A: Despite headwinds from the current housing market, PMS remains steady with expectations that new product introductions will boost performance into 2025, reflecting cautious optimism. -
Order Growth
Q: What’s driving order growth ahead?
A: Increased daily sales averages, especially from BRK products and large accounts in the residential market, are helping counter the softer macro backdrop. -
HVAC Inventory
Q: Are HVAC inventories at healthy levels?
A: In North America, inventories have normalized while EMEA still faces challenges expected to resolve by mid-2025, ensuring steady supply channels in the region. -
Security Products
Q: What about security products performance?
A: Management aims to revive the segment through new product introductions and focused investment, which should leverage differentiated offerings to improve margins. -
Project Delays
Q: Do project delays persist?
A: Earlier delays in large projects have largely abated over the past few months, indicating improved execution and scheduling reliability.
Research analysts covering RESIDEO TECHNOLOGIES.