Resideo Completes ADI Spin-Off and Cuts Debt

The Tip Desk · November 12, 2026 · 3 min read

Third-quarter revenue was $727 million, up 3% year over year, as standalone Adjusted EBITDA reached $154 million.

Resideo Technologies (REZI), a global developer and manufacturer of control and sensing products for residential markets, completed the spin-off of its ADI Global Distribution segment on August 3, 2026, and used the proceeds to cut gross debt by $1.1 billion in the third fiscal quarter ended October 3, 2026.

The company received a $900 million cash dividend from ADI as partial consideration for assets transferred in the separation and combined it with $200 million of cash on hand to repay that debt. Total outstanding gross debt stood at $2.1 billion and cash and cash equivalents at $229 million at October 3, 2026. Historical ADI results are now presented as discontinued operations.

Total revenue was $727 million, up 3% from $703 million a year earlier, and near the high end of the company’s outlook range. Foreign currency reduced the total by about 50 basis points. Revenue excluding OEM Security was $694 million, up 6% from $653 million, and grew across sales channels and product categories on volume and pricing, the company said. OEM Security revenue was $33 million, down 34% from $50 million, on reduced volumes from a large OEM Security customer.

Gross margin was 40.4%, the 14th consecutive quarter of year-over-year expansion. The company said gains from price increases, operational efficiencies, and tariff refunds were partially offset by unfavorable product sales mix and inflationary input costs.

GAAP income from continuing operations, net of taxes, was $31 million, down 66% from $90 million in the third quarter of 2025. GAAP diluted EPS from continuing operations was $0.14, down 71%. Standalone Adjusted EBITDA was $154 million, up 5% from $146 million, and near the high end of the outlook range. Standalone Adjusted diluted EPS was $0.52, up 8%. The company attributed the EBITDA increase primarily to higher gross profit dollars and controlled growth in operating expenses.

Selling, general and administrative expenses rose $24 million from a year earlier, driven primarily by $30 million of non-recurring business separation expenses tied to the ADI Spin-Off. Restructuring, impairment and extinguishment expenses increased $17 million on continued manufacturing operations optimization and higher debt extinguishment charges. Research and development expenses increased $4 million on investments in new product launches.

Net cash provided by operating activities of continuing operations was $33 million, compared with net cash used of $1.59 billion in the third quarter of 2025. The company said the increase was primarily due to the $1.59 billion payment made in the third quarter of 2025 to Honeywell to terminate the Indemnification Agreement. Resideo also made a $20 million payment to ADI under a post-separation cash true-up. Outstanding Series A preferred stock was reduced by 150,000 shares, leaving 350,000 shares.

President and CEO Tom Surran said results were near the high end of outlook ranges in the first quarter after the ADI separation, and that the company used the ADI dividend and cash on hand to reduce debt. He said the company remains focused on differentiated products, including new AI-powered capabilities on the next-generation FORTIQ software platform.

For the fourth quarter of 2026, Resideo now expects revenue of $710 million to $730 million and Standalone Adjusted EBITDA of $145 million to $155 million. Full-year 2026 outlook is revenue of $2,927 million to $2,947 million, Standalone Adjusted EBITDA of $614 million to $624 million, Standalone Adjusted EPS of $1.92 to $1.98, and cash provided by operating activities of at least $165 million.