Resideo Announces Full Year and Fourth Quarter 2024 Financial Results and Initiates 2025 Outlook

⁽¹⁾

Excludes the impact of the Snap One acquisition of $553 million, the Genesis divestiture of $105 million, and foreign currency fluctuations of $6 million.

⁽²⁾

This press release includes certain "non-GAAP financial measures" as defined under the Securities Exchange Act of 1934. Resideo management believes the use of such non-GAAP financial measures, specifically Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS, assists investors in understanding the ongoing operating performance of Resideo by presenting the financial results between periods on a more comparable basis. See reconciliations of U.S. GAAP results to adjusted results in the accompanying tables.

($ in millions, except per share data)

Q1 2025

2025

Non-GAAP Adjusted EBITDA

$150 - $170

$725 - $805

Non-GAAP Adjusted Earnings Per Share

$0.27 - $0.33

$2.23 - $2.47

Cash Provided by Operations

$345 - $405

Contacts:

Investors:

Media:

Christopher T. Lee

Garrett Terry

Global Head of Investor Relations

Corporate Communications Manager

[email protected]

[email protected]

Q4 2024 ⁽¹⁾

YTD 2024 ⁽¹⁾

(in millions)

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

$      669

$    1,189

$        —

$   1,858

$   2,564

$    4,197

$       —

$   6,761

Cost of goods sold

396

932

—

1,328

1,514

3,346

—

4,860

Gross profit

273

257

—

530

1,050

851

—

1,901

Research and development expenses

25

17

—

42

94

17

—

111

Selling, general and administrative
     expenses

109

169

32

310

416

566

156

1,138

Intangible asset amortization

5

23

1

29

23

54

3

80

Restructuring, impairment and
     extinguishment costs

1

—

4

5

14

19

19

52

Income (loss) from operations

$      133

$         48

$      (37)

$      144

$      503

$        195

$   (178)

$      520

Q4 2023 ⁽¹⁾

YTD 2023 ⁽¹⁾

(in millions)

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

$      683

$       854

$        —

$   1,537

$   2,672

$    3,570

$        —

$   6,242

Cost of goods sold

413

700

1

1,114

1,640

2,902

4

4,546

Gross profit (loss)

270

154

(1)

423

1,032

668

(4)

1,696

Research and development expenses

26

—

(1)

25

108

—

1

109

Selling, general and administrative
     expenses

106

100

35

241

428

407

125

960

Intangible asset amortization

6

3

1

10

23

11

4

38

Restructuring and impairment
     expenses

—

—

—

—

27

12

3

42

Income (loss) from operations

$      132

$         51

$      (36)

$      147

$      446

$       238

$    (137)

$      547

Q4 2024 % change compared with
prior period

YTD 2024 % change compared with
prior period

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

(2) %

39 %

N/A

21 %

(4) %

18 %

N/A

8 %

Cost of goods sold

(4) %

33 %

N/A

19 %

(8) %

15 %

N/A

7 %

Gross profit

1 %

67 %

N/A

25 %

2 %

27 %

N/A

12 %

Research and development expenses

(4) %

N/A

N/A

68 %

(13) %

N/A

N/A

2 %

Selling, general and administrative
     expenses

3 %

69 %

(9) %

29 %

(3) %

39 %

25 %

19 %

Intangible asset amortization

(17) %

667 %

— %

190 %

— %

391 %

(25) %

111 %

Restructuring, impairment and
     extinguishment costs

N/A

N/A

N/A

N/A

(48) %

58 %

533 %

24 %

Income (loss) from operations

1 %

(6) %

3 %

(2) %

13 %

(18) %

30 %

(5) %

⁽¹⁾

On January 1, 2024, certain corporate functions were decentralized into the operating segments aligning with the business strategy. Functional expenses related to information technology, finance, tax, business development, and research and development are now recorded within the Products and Solutions and ADI Global Distribution segments. For the three and twelve months ended December 31, 2023, $12 million and $49 million of corporate expenses have been reclassified into the Products and Solutions while $8 million and $32 million of corporate expenses have been reclassified into the ADI Global Distribution segments, respectively, decreasing reported Income from Operations to conform to the current year presentation.

Three Months Ended

Twelve Months Ended

(in millions, except per share data)

December 31,
2024

December 31,
2023

December 31,
2024

December 31,
2023

Net revenue

$               1,858

$                1,537

$                6,761

$               6,242

Cost of goods sold

1,328

1,114

4,860

4,546

Gross profit

530

423

1,901

1,696

Operating expenses:

Research and development expenses

42

25

111

109

Selling, general and administrative expenses

310

241

1,138

960

Intangible asset amortization

29

10

80

38

Restructuring, impairment and extinguishment
costs

5

—

52

42

Total operating expenses

386

276

1,381

1,149

Income from operations

144

147

520

547

Reimbursement Agreement expense ⁽¹⁾

76

50

211

178

Other (income) expenses, net

(3)

(19)

7

(9)

Interest expense, net

26

15

81

65

Income before taxes

45

101

221

313

Provision for income taxes

22

19

105

103

Net income

$                     23

$                     82

$                    116

$                  210

Less: preferred stock dividends

9

—

19

—

Less: undistributed income allocated to preferred
stockholders

2

—

6

—

Net income available to common stockholders

$                     12

$                     82

$                      91

$                  210

Earnings per common share:

Basic

$                 0.08

$                  0.56

$                   0.62

$                 1.43

Diluted

$                 0.08

$                  0.56

$                   0.61

$                 1.42

Weighted average common shares outstanding:

Basic

147

146

146

147

Diluted

150

147

149

148

⁽¹⁾

Represents the expense incurred pursuant to the Reimbursement Agreement, which has an annual cash payment cap of $140 million. The following table summarizes information concerning the Reimbursement Agreement:

Three Months Ended

Twelve Months Ended

(in millions)

December 31,
2024

December 31,
2023

December 31,
2024

December 31,
2023

Accrual for Reimbursement Agreement liabilities
deemed probable and reasonably estimable

$                     76

$                     50

$                   211

$                   178

Cash payments made to Honeywell

(35)

(35)

(140)

(140)

Accrual increase, non-cash component in period

$                     41

$                     15

$                     71

$                     38

(in millions, except par value)

December 31,
2024

December 31,
2023

ASSETS

Current assets:

Cash and cash equivalents

$                    692

$                    636

Accounts receivable, net

1,023

973

Inventories, net

1,237

941

Other current assets

220

193

Total current assets

3,172

2,743

Property, plant and equipment, net

410

390

Goodwill

3,072

2,705

Intangible assets, net

1,176

461

Other assets

369

346

Total assets

$                8,199

$                6,645

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$                1,073

$                    905

Accrued liabilities

717

620

Total current liabilities

1,790

1,525

Long-term debt

1,983

1,396

Obligations payable under Indemnification Agreements

674

609

Other liabilities

443

366

Total liabilities

4,890

3,896

Stockholders' equity

Preferred stock, $0.001 par value: 100 shares authorized, 0.5 shares issued and
outstanding at December 31, 2024 and no shares issued and outstanding at
December 31, 2023, respectively

482

—

Common stock, $0.001 par value: 700 shares authorized, 154 and 147 shares
issued and outstanding at December 31, 2024, respectively, and 151 and 145 shares
issued and outstanding at December 31, 2023, respectively

—

—

Additional paid-in capital

2,315

2,226

Retained earnings

907

810

Accumulated other comprehensive loss, net

(284)

(194)

Treasury stock at cost

(111)

(93)

Total stockholders' equity

3,309

2,749

Total liabilities and stockholders' equity

$                8,199

$                6,645

Three Months Ended

Twelve Months Ended

(in millions)

December 31,
2024

December 31,
2023

December 31,
2024

December 31,
2023

Cash Flows From Operating Activities:

Net income

$                      23

$                       82

$                    116

$                    210

Adjustments to reconcile net income to net
cash in operating activities:

Depreciation and amortization

46

27

144

98

Restructuring, impairment and
extinguishment costs

5

—

52

42

Stock-based compensation expense

15

8

59

44

Deferred income taxes

(31)

(28)

(31)

(28)

Other, net

2

(16)

7

(14)

Changes in assets and liabilities, net of
acquired companies:

Accounts receivable, net

61

28

(18)

19

Inventories, net

(58)

36

(71)

32

Other current assets

(20)

11

(5)

6

Accounts payable

65

32

127

18

Accrued liabilities

69

80

4

(34)

Other, net

26

3

60

47

Net cash provided by operating activities

203

263

444

440

Cash Flows From Investing Activities:

Acquisitions, net of cash acquired

(3)

—

(1,337)

(16)

Capital expenditures

(22)

(31)

(80)

(105)

Proceeds from sale of business

—

86

—

86

Other investing activities, net

2

(9)

8

(9)

Net cash used in investing activities

(23)

46

(1,409)

(44)

Cash Flows From Financing Activities:

Proceeds from issuance of long-term debt, net

—

—

1,176

—

Proceeds from issuance of preferred stock,
net of issuance costs

—

—

482

—

Repayments of long-term debt

(3)

(3)

(605)

(12)

Preferred dividend payments

(12)

—

(12)

—

Common stock repurchases

—

(13)

(1)

(41)

Other financing activities, net

3

(1)

(9)

(11)

Net cash provided by (used in) financing
activities

(12)

(17)

1,031

(64)

Effect of foreign exchange rate changes on
cash, cash equivalents and restricted cash

(7)

(25)

(10)

(24)

Net increase in cash, cash equivalents and
restricted cash

161

267

56

308

Cash, cash equivalents and restricted cash at
beginning of period

532

370

637

329

Cash, cash equivalents and restricted cash at
end of period

$                    693

$                    637

$                    693

$                    637

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND

NET INCOME COMPARISON

RESIDEO TECHNOLOGIES, INC.

Three Months Ended

Twelve Months Ended

(in millions, except per share data)

December 31,
2024

December 31,
2023

December 31,
2024

December 31,
2023

GAAP Net income

$                     23

$                    82

$                   116

$                   210

Less: preferred stock dividends

9

—

19

—

Less: undistributed income allocated to
preferred stockholders

2

—

6

—

GAAP Net income available to common
stockholders

12

82

91

210

Intangible asset amortization

29

10

80

38

Reimbursement Agreement accrual increase,
non-cash component ⁽¹⁾

41

15

71

38

Stock-based compensation expense

15

8

59

44

Restructuring, impairment and extinguishment
costs, net

5

—

52

42

Acquisition and integration costs

8

—

45

—

Undistributed income allocated to preferred
stockholders

2

—

6

—

Other ⁽²⁾

1

(17)

20

(10)

Tax effect of applicable non-GAAP
adjustments ⁽³⁾

(24)

(4)

(83)

(38)

Non-GAAP Adjusted net income

$                     89

$                    94

$                   341

$                   324

Three Months Ended

Twelve Months Ended

December 31,
2024

December 31,
2023

December 31,
2024

December 31,
2023

GAAP Net income per diluted common share

$                 0.08

$                 0.56

$                  0.61

$                  1.42

Intangible asset amortization

0.19

0.07

0.54

0.26

Reimbursement Agreement accrual increase,
non-cash component ⁽¹⁾

0.27

0.10

0.48

0.26

Stock-based compensation expense

0.10

0.05

0.40

0.30

Restructuring, impairment and extinguishment
costs, net

0.03

—

0.35

0.28

Acquisition and integration costs

0.05

—

0.30

—

Undistributed income allocated to preferred
stockholders

0.01

—

0.04

—

Other ⁽²⁾

0.02

(0.12)

0.13

(0.07)

Tax effect of applicable non-GAAP
adjustments ⁽³⁾

(0.16)

(0.02)

(0.56)

(0.26)

Non-GAAP Adjusted net income per diluted
common share

$                 0.59

$                 0.64

$                  2.29

$                  2.19

⁽¹⁾

Refer to the Consolidated Statements of Operations herein.

⁽²⁾

For 2024 periods, other includes net periodic benefit costs, excluding service costs, Tax Matters Agreement gain, gain on sale of investments, foreign exchange transaction loss (income), litigation settlements, and an inventory step-up related to the Snap One acquisition. For 2023 periods, other includes net periodic benefits costs, excluding service costs, Tax Matters Agreement gain, gain on sale of investments, and foreign exchange transaction loss (income).

⁽³⁾

We calculated the tax effect of non-GAAP adjustments by applying a flat statutory tax rate of 25%.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED EBITDA AND NET INCOME COMPARISON

(Unaudited)

RESIDEO TECHNOLOGIES, INC.

Three Months Ended

Twelve Months Ended

(in millions)

December 31,
2024

December 31,
2023

December 31,
2024

December 31,
2023

Net revenue

$             1,858

$           1,537

$           6,761

$           6,242

GAAP Net income

$                   23

$                 82

$               116

$               210

GAAP Net income as a % of net revenue

1.2 %

5.3 %

1.7 %

3.4 %

Provision for income taxes

22

19

105

103

GAAP Income before taxes

45

101

221

313

Depreciation and amortization

46

27

144

98

Interest expense, net

26

15

81

65

Reimbursement Agreement accrual increase,
non-cash component ⁽¹⁾

41

15

71

38

Stock-based compensation expense

15

8

59

44

Restructuring, impairment and extinguishment
costs, net

5

—

52

42

Acquisition and integration costs

8

—

45

—

Other ⁽²⁾

1

(17)

20

(10)

Non-GAAP Adjusted EBITDA

$                 187

$               149

$               693

$               590

Non-GAAP Adjusted EBITDA as a % of net
revenue

10.1 %

9.7 %

10.2 %

9.5 %

⁽¹⁾

Refer to the Consolidated Statements of Operations herein.

⁽²⁾

For 2024 periods, other includes net periodic benefit costs, excluding service costs, Tax Matters Agreement gain, gain on sale of investments, foreign exchange transaction loss (income), litigation settlements, and an inventory step-up adjustment related to the Snap One acquisition. For 2023 periods, other includes net periodic benefit costs, excluding service costs, Tax Matters Agreement gain, gain on sale of investments, and foreign exchange transaction loss (income).

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Unaudited)

PRODUCTS AND SOLUTIONS SEGMENT

Three Months Ended

Twelve Months Ended

(in millions)

December 31,
2024

December 31,
2023

December 31,
2024

December 31,
2023

Net revenue

$               669

$               683

$           2,564

$           2,672

GAAP Income from operations

$               133

$               132

$               503

$               446

GAAP Income from operations as a % of net
revenue

19.9 %

19.3 %

19.6 %

16.7 %

Stock-based compensation expense

4

4

19

18

Restructuring and impairment expense

1

—

14

27

Other ⁽¹⁾

2

—

7

—

Non-GAAP Adjusted Income from Operations

$               140

$               136

$               543

$               491

Depreciation and amortization

17

20

68

71

Non-GAAP Adjusted EBITDA

$               157

$               156

$               611

$               562

Non-GAAP Adjusted EBITDA as a % of net
revenue

23.5 %

22.8 %

23.8 %

21.0 %

⁽¹⁾

Other includes litigation settlements.

ADI GLOBAL DISTRIBUTION SEGMENT

Three Months Ended

Twelve Months Ended

(in millions)

December 31,
2024

December 31,
2023

December 31,
2024

December 31,
2023

Net revenue

$           1,189

$               854

$           4,197

$           3,570

GAAP Income from operations

$                 48

$                 51

$               195

$               238

GAAP Income from operations as a % of net
revenue

4.0 %

6.0 %

4.6 %

6.7 %

Restructuring and impairment expense

—

—

19

12

Stock-based compensation expense

5

2

13

7

Acquisition and integration costs

6

—

12

—

Other ⁽¹⁾

5

—

11

—

Non-GAAP Adjusted Income from Operations

$                 64

$                 53

$               250

$               257

Depreciation and amortization

27

5

68

18

Non-GAAP Adjusted EBITDA

$                 91

$                 58

$               318

$               275

Non-GAAP Adjusted EBITDA as a % of net
revenue

7.7 %

6.8 %

7.6 %

7.7 %

⁽¹⁾

Other includes inventory step-up adjustment related to the Snap One acquisition and litigation settlements.