Resideo Technologies (REZI) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenue reached $1.83 billion, up 18% year-over-year, with mid-single-digit organic growth in both Products & Solutions and ADI, marking the first time since Q2 2022 both segments grew organically year-over-year.

• Adjusted EBITDA was $190 million, up 29% year-over-year and exceeding guidance, while net income available to common stockholders was $11 million, down from $21 million in Q3 2023.

• Snap One acquisition and integration progressed well, contributing to ADI's growth and expanding the product portfolio, with synergy targets on track.

• New product introductions, especially in thermostats and safety products, drove momentum and supported results.

• CEO announced intention to retire in 2025, with a transition plan in place.

Financial highlights

• Q3 total revenue was $1.83 billion, up 18% year-over-year; adjusted EBITDA reached $190 million, up 29%; adjusted EPS was $0.58, compared to $0.55 in Q3 2023; GAAP EPS was $0.07, down from $0.14.

• Gross margin expanded to 28.7%, up 190 bps year-over-year, driven by lower manufacturing costs and acquisition benefits.

• Operating cash flow was $147 million, up from $60 million in Q3 2023.

• Net income available to common stockholders was $11 million; net income was $20 million for Q3 2024.

• Cash and cash equivalents stood at $531 million as of September 28, 2024.

Outlook and guidance

• Q4 2024 net revenue expected between $1.815 billion and $1.855 billion; adjusted EBITDA $170–$185 million; adjusted EPS $0.51–$0.61.

• Full-year 2024 net revenue guidance is $6.72–$6.76 billion, adjusted EBITDA $672–$687 million, and adjusted EPS $2.18–$2.28.

• At least $375 million in operating cash flow expected for full year 2024.

• Management expects positive business momentum to continue into 2025.

• Q4 2024 expected to face a mixed macroeconomic environment, with improving interest rates and new home sales but continued softness in existing home sales and EMEA.