Resideo Technologies (REZI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $1.59–$1.6 billion, down 0.8–1% year-over-year, with adjusted EBITDA up 13% to $175 million, exceeding guidance.

• Gross margin improved to 28.1% (up 90 bps), with Products and Solutions gross margin at 41.3%, the highest since Q1 2022.

• Snap One acquisition completed for $1.4 billion, expanding product breadth, exclusive brands, and digital channels; $45 million revenue contributed post-acquisition.

• Free cash flow was $92 million for Q2, with full-year operating cash flow target raised to at least $375 million.

• Leadership transition: Mike Carlet appointed CFO, with Tony Trunzo assisting through March 2025.

Financial highlights

• Adjusted EBITDA was $175 million ($166 million excluding Snap One), up from $155 million in Q2 2023; adjusted EBITDA margin improved to 11.0%.

• Adjusted EPS was $0.62, up from $0.48 last year; GAAP EPS was $0.19, down from $0.34.

• Net income for Q2 was $30 million, down from $50 million year-over-year; operating income was $122 million.

• Cash and cash equivalents at quarter-end were $413 million; total debt stood at $1.99 billion.

• Free cash flow conversion exceeded 100% of net income over the past four years.

Outlook and guidance

• Q3 2024 revenue expected between $1.79–$1.83 billion; adjusted EBITDA $170–$180 million; adjusted EPS $0.49–$0.59.

• Full-year 2024 guidance: revenue $6.68–$6.76 billion, adjusted EBITDA $655–$695 million, adjusted EPS $2.15–$2.35, and operating cash flow at least $375 million.

• Snap One expected to contribute $550 million in revenue and $65 million in adjusted EBITDA for 2024.

• ADI revenue growth projected at 0%–2% for Q3; Products & Solutions revenue expected to decline 5%–3% year-over-year.

• 2024 revenue expected to be flat to down low single-digits year-over-year, with residential repair and remodel activity flat to down.