Resideo Technologies Reports Strong Q1 Earnings Amid Tariff Challenges

Resideo Technologies ((REZI)) has held its Q1 earnings call. Read on for the main highlights of the call.

Resideo Technologies recently held its earnings call, revealing a generally positive sentiment driven by strong financial performance and revenue growth across key segments. The company effectively mitigated tariff impacts and capitalized on product demand, although challenges remain in certain areas such as tariff impacts and softness in specific categories.

Strong Revenue Growth

Resideo Technologies reported a total net revenue of approximately $1.8 billion, marking a 19% increase year-over-year. This impressive growth was bolstered by the impact of the Snap One acquisition, highlighting the company’s strategic expansion efforts.

Significant Gross Margin Expansion

The company achieved a total gross margin of 28.9%, up 200 basis points from the previous year. This marks the eighth consecutive quarter of year-over-year gross margin expansion, underscoring Resideo’s effective cost management and operational efficiencies.

Record Growth in ADI Segment

The ADI segment experienced remarkable growth, with a 29% increase in reported net revenue in the first quarter. This record growth reflects the segment’s robust performance and strategic market positioning.

Positive Product and Solutions Performance

The Products and Solutions segment reported a 5% year-over-year revenue growth, with 6% organic growth. The strong demand for new products played a crucial role in this positive performance, showcasing Resideo’s innovative capabilities.

Strong Adjusted EBITDA and Earnings Per Share

Resideo’s total adjusted EBITDA grew by 23% year-over-year to $168 million, while adjusted earnings per share increased by 34% to $0.63. These figures highlight the company’s strong profitability and efficient financial management.

Challenges with Tariffs

Despite the positive financial results, the ADI segment faces challenges due to significant China tariffs, which could potentially impact 20-25% of its total cost of goods sold. Resideo is actively working on strategic mitigation actions to address these challenges.

Softness in Residential Audio Video Category

The residential audio video category experienced a low single-digit percentage decline, primarily due to a soft US residential market. This softness presents a challenge that Resideo is monitoring closely.

Forward-Looking Guidance

Looking ahead, Resideo maintained its 2025 outlook, emphasizing strong execution and proactive strategies to navigate dynamic market conditions. The company surpassed the high end of its quarterly outlook metrics and continues to focus on strategic actions to mitigate tariff impacts and drive growth.

In summary, Resideo Technologies’ earnings call painted a picture of strong financial health and strategic growth, despite facing challenges in certain areas. The company’s effective management of tariffs and continued innovation in product offerings position it well for future success.