Key Highlights

  • Revenue rose 3.4% to USD 727 million in the quarter ended October 3, 2026, from USD 703 million, while gross Margin was 40.4%, up four basis points.
  • GAAP Diluted Earnings per Share from continuing operations were USD 0.14 against USD 0.49 a year ago, and Operating Income fell to USD 72 million from USD 106 million.
  • Stand-alone adjusted EBITDA was USD 154 million, up about 5%, and stand-alone adjusted earnings were USD 0.52 per share, excluding USD 30 million of Business separation expenses.
  • Management raised its 2026 outlook, now expecting USD 2.927 billion to USD 2.947 billion of Revenue and stand-alone adjusted earnings of USD 1.92 to USD 1.98 per share.

Spin-Off Costs and Lower Operating Margin Hit Earnings

Resideo Technologies (NYSE:REZI) filed its Quarterly Report on November 10, 2026 and held its call on November 11, 2026. It was the first quarter after the August 3, 2026 spin-off of the ADI distribution business, now reported as discontinued operations. Operating income was 9.9% of revenue versus 15.1%. Net Income was USD 22 million against USD 156 million, including a USD 9 million loss from discontinued operations. Management said adjusted earnings exclude USD 30 million of separation costs. Gross margin included USD 6 million of Tariff refunds and about USD 13 million of input cost headwinds, partly offset by USD 3 million from June price increases.

Retail Strength, Weaker OEM Security and Deleveraging

Management said revenue grew 6% across all channels except OEM security, led by retail up 15%, OEM combustion up 9% and distribution up 3%, where electrical distribution posted record Volume and double-digit revenue growth. OEM security brought in USD 33 million, down USD 17 million, which management called non-core. The company received a one-time USD 900 million Dividend from ADI and repaid USD 1.1 billion of gross debt, leaving total gross Debt of USD 2.1 billion. Cash from continuing operations was USD 33 million, reduced by about USD 30 million of spin-related payments. ADIG, now a separate public company, bought USD 43 million of products in the quarter.

Raised Outlook Still Leaves Tariff and Housing Risks

On the call management guided fourth-quarter revenue to USD 710 million to USD 730 million, stand-alone adjusted EBITDA to USD 145 million to USD 155 million and adjusted earnings to USD 0.42 to USD 0.48 per share. For 2026 it expects stand-alone adjusted EBITDA of USD 614 million to USD 624 million and cash from operations of at least USD 165 million. The filing outlook calls for low-to-mid single-digit revenue growth for 2026 and cites slow U.S. housing growth, a slowdown with a large OEM security customer and tariff uncertainty, though management does not expect a material tariff impact. The company is also closing Manufacturing in Scotland as part of plans to exit three underused plants.

Where Things Stand

Higher sales did not translate into higher GAAP earnings because operating margin fell, separation costs landed and the spin-off reshaped the income statement. Resideo Technologies (NYSE:REZI) still beat on the adjusted measures that management uses, with stand-alone adjusted EBITDA up about 5% and an upgraded full-year outlook. Reported and adjusted figures differ materially, and debt remains USD 2.1 billion. The next markers are the fourth-quarter result against the USD 0.42 to USD 0.48 range, new security product launches and further debt reduction.