Resideo Technologies (REZI) J.P. Morgan 2026 Global Leveraged Finance Conference summary

Business overview and market positioning

• Operates in two segments: Products & Solutions (P&S) and ADI, with combined revenues nearing $8 billion on a run-rate basis.

• P&S focuses on residential control and sensing products, including thermostats, security, and water detection, primarily serving installers.

• ADI is a leader in commercial security, fire, and AV distribution, recently expanded into high-end AV through the Snap One acquisition.

• Both segments prioritize professional installers as their primary customers, differentiating them in the market.

Market trends and demand outlook

• P&S is heavily weighted toward repair and remodel activity over new builds, with a 3:1 ratio.

• Residential and remodel markets have been constrained in recent years, with limited short-term growth expected but long-term tailwinds anticipated.

• ADI benefits from technology-driven upgrades in commercial security, with growth outpacing GDP by a few points.

Strategic separation of ADI

• The rationale for spinning off ADI includes lack of synergy, different capital allocation needs, and market confusion in valuing the combined entity.

• Settlement of the Indemnification and Reimbursement Agreement (IRA) with Honeywell removed the main barrier to separation.

• Post-spin, both businesses will have independent boards, capital structures, and clearer market positioning.