Resideo Technologies Inc.

11/10/2026 | Press release | Distributed by Public on 11/10/2026 15:58

Quarterly Report for Quarter Ending October 3, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following information should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements included herein under "Item 1. Financial Statements." and the Audited Consolidated Financial Statements and the notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2025 Annual Report on Form 10-K.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q ("Quarterly Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions, and projections about our industries and our business and financial results. Forward-looking statements often include words such as "anticipates," "estimates," "expects," "projects," "forecasts," "intends," "plans," "continues," "believes," "may," "will," "goals," and words and terms of similar substance in connection with discussions of future operating or financial performance. This Quarterly Report includes industry and market data that we obtained from various third-party sources, including forecasts based upon such data; as with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by us or on our behalf. Although we believe that the forward-looking statements contained in this Quarterly Report are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to:
•competition from other companies in our markets and segments, as well as in new markets and emerging markets;
•the potential adverse impacts of tariffs (including the timing, amount and recoverability of tariff refunds or claims in relation to refunds), import/export restrictions, or other trade barriers on global economic conditions, financial markets and our business;
•our ability to obtain additional future capital on favorable terms or at all;
•our ability to identify consumer preferences and industry standards, develop, and protect intellectual property related thereto, and successfully market new technologies, products, and services to consumers;
•our reliance on independent integrators to sell and install our solutions;
•our reliance on certain suppliers;
•the impact of disruptions in our supply chain from third-party suppliers and manufacturers, including our inability to obtain necessary raw materials and product components, production equipment, or replacement parts;
•inability to consummate acquisitions on satisfactory terms or to integrate such acquisitions effectively;
•the impact of earthquakes, hurricanes, fires, power outages, floods, pandemics, epidemics, natural disasters, and other catastrophic events or other public health emergencies;
•the impact of potentially volatile global market, geopolitical and economic conditions and industry, and end market cyclicality, including factors such as interest rates, inflation, energy costs, costs of raw materials and components, fuel and shipping costs, availability of financing, consumer spending habits and preferences, repair and remodeling activity, residential and commercial construction, housing market changes, labor costs, and employment rates;
•failure to achieve and maintain a high level of product and service quality, including the impact of warranty claims, product recalls, and product liability actions that may be brought against us;
•our ability to retain or expand relationships with significant customers;
•our dependence on a select group of large customers as significant customers, including ADIG, as significant customers and our ability to maintain our commercial relationships with such customers on favorable terms;
•seasonal fluctuations and longer term trends in climate and weather conditions affecting demand for our products;
•the significant failure or inability to comply with specifications and manufacturing requirements or delays or other problems with existing or new products or inability to meet price requirements;
•inability to successfully execute restructuring or transformation programs or to effectively manage our workforce;
•the failure to increase productivity through sustainable operational improvements;
•our ability to implement pricing actions;
•the failure to acquire, implement, maintain and upgrade business technology infrastructure systems;
•economic, political, regulatory, foreign exchange, and other risks of international operations;
•our dependence upon information technology infrastructure and network operations having adequate cyber-security functionality;
•risks associated with our relationships with Honeywell, including our reliance on Honeywell for the Honeywell Home trademark;
•failure to comply with the broad range of current and future standards, laws, and regulations in the jurisdictions in which we operate;
•the impact of potential material litigation matters, government proceedings, and other contingencies and uncertainties;
•our ability to borrow funds and access capital markets in light of the terms of our debt documents or otherwise;
•provisions in our governing documents discouraging takeovers;
•our ability to recruit and retain qualified personnel;
•uncertainty in the development, deployment, and the use of artificial intelligence in our products and services and internal systems, as well as our business interests more broadly;
•currency exchange rate, stock price, and effective tax rate fluctuations;
•the CD&R Stockholder's interest in and influence over us that may diverge from, or even conflict with, interests of the holders of our common stock, and the reduction in the relative voting power of holders of our common stock resulting from the issuance of preferred stock;
•our ability to maintain effective internal controls and deliver timely financial statements;
•impairment of goodwill, other intangible assets, and long-lived assets;
•being required to make significant cash contributions to our defined benefit pension plans;
•compatibility and ease of integration of our products and solutions with third-party products and services and our ability to control such third-party integrations;
•regulations and societal actions to respond to global climate change;
•ability to reduce our financial leverage and interest expense and to achieve our liquidity expectations;
•risks and uncertainties associated with the recently completed ADI Spin-Off, including our ability to realize the anticipated benefits of the ADI Spin-Off, our dependence on transition services and other arrangements with ADIG following the separation, and changes to our capital structure, leverage, and liquidity profile resulting from the separation; and
•other risks detailed under the caption "Risk Factors" in this Quarterly Report, in Part II, Item 1A. Risk Factors, and certain factors discussed elsewhere in our 2025 Annual Report on Form 10-K and other filings we make with the SEC.
Other than as described in Part II, Item 1A. Risk Factors, of this Quarterly Report, there have been no material changes to the risk factors described in our 2025 Annual Report on Form 10-K. These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Even if our results of operations, financial condition and liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.
Any forward-looking statements made by us in this Quarterly Report speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events, or otherwise.
Current Quarter Highlights
•Revenue of $727 million, up 3.4% from $703 million in the third quarter of 2025
•Gross profit margin of 40.4%, an increase of four basis points compared to the third quarter of 2025
•Operating income of $72 million, or 9.9% of revenue, compared to $106 million, or 15.1% of revenue in the third quarter of 2025
•Fully diluted earnings from per share from continuing operations attributable to common shareholders of $0.14, compared to fully diluted earnings per share from continuing operations of $0.49 in the third quarter of 2025
•Repaid $1.1 billion of gross debt; total gross debt of $2.1 billion at end of third quarter
Outlook
For 2026, we anticipate executing our business operations against a highly dynamic global macroeconomic environment. The vast majority of costs associated with the sensing and control products that Resideo sells in the U.S. are incurred in Mexico. Most Resideo products manufactured in Mexico are currently duty free under the United States-Mexico-Canada Agreement ("USMCA") or qualify for specific commodity exceptions to recent tariffs. While imported products that are not subject to the USMCA or other exceptions are subject to the new Section 301 tariffs of 10% - 12.5% implemented on July 24, 2026 and, in some instances, the Section 232 metals tariffs ranging from 15% - 50% on the finished goods that were implemented on April 6, 2026, we do not expect a material impact to our business due to these tariffs. We are monitoring the litigation and recent ruling from the U.S. Court of International Trade on tariffs. We will continue to take actions to address the cost impact of tariffs that affect our business; however, rising prices and other macroeconomic factors may lead to lower purchase levels by our customers. We are monitoring these dynamics closely and will adjust our business operations as appropriate.
We anticipate slow growth in the U.S. residential housing market. In addition, we anticipate a continued slowdown with a large customer in the OEM security channel during the second half of 2026 relative to second half of 2025. Based on the aforementioned, our 2026 revenue outlook is growth in the low-to-mid-single-digits range year-over-year.
Overview and Business Trends
We are a global building technologies company that is a leading developer and manufacturer of critical control and sensing solutions for residential and commercial markets. We serve professional installers and integrators across diverse product categories, such as heating, ventilation, and air conditioning controls; combustion; life safety; security; and water. Our comfort and protection solutions are sold under trusted well-established brands, such as Braukmann, BRK, First Alert, and Honeywell Home, and can be found in more than 150 million residential and commercial spaces globally, with tens of millions of new devices sold annually.
Our financial performance is influenced by macroeconomic factors underlying end user demand such as repair and remodeling activity, residential and commercial construction, new and existing home sales, employment rates, interest rates and bank lending standards, and supply chain dynamics that can be influenced by geopolitics. The ongoing uncertainty and volatility in the global macroeconomic and political environments have affected both supply and demand dynamics, and could continue to affect our visibility toward future performance. Uncertainties remain, including the global tariff environment, geopolitical relations between and among the U.S. and other countries, potential for changes in inflation and interest rates, increased labor costs, reduced consumer spending due to softening labor markets, elevated mortgage rates, shifts in energy policies, and potential market and other disruption from any of the above.
Demand for many of our products is seasonal and affected by the severity of weather conditions, and following the ADI Spin-Off, we expect seasonality and severity of weather to have a greater effect on our results. In addition, following the ADI Spin-Off, ADIG is a significant third-party customer, with sales to ADIG of $43 million and $126 million for the three and nine months ended October 3, 2026, respectively.
During the third quarter of 2026, in connection with the ADI Spin-Off, we transitioned to a realigned organizational reporting structure consistent with the manner in which our Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM"), assesses performance and allocates resources. Following the realignment, the Company manages its continuing operations as a single operating segment and, therefore, has one reportable segment.
Our offerings include temperature and humidity control, water and air solutions, smoke and carbon monoxide detection, home safety products, residential and small business security products, video cameras, cloud infrastructure, installation and maintenance tools, and related software. We also sell components to manufacturers of water heaters, heat pumps, and boilers. These products fall into our Air, Water, Safety, Security and Combustion categories that are sold through the distribution, retail and OEM combustion channels.
On August 3, 2026, we completed the separation of our former ADI segment through a tax-free spin-off to our shareholders. Resideo stockholders received one share of ADIG common stock for every two shares of Resideo stock outstanding and held as of the July 20, 2026 record date. Following the ADI Spin-Off, ADIG became an independent public company trading under the symbol "ADIG" on the New York Stock Exchange and Resideo retains no ownership interest in ADIG. The ADI Spin-Off is intended to qualify as a tax-free transaction for U.S. federal income tax purposes. Management concluded that the disposal of ADIG represented a strategic shift that had a major effect on Resideo's operations and financial results. Accordingly, the operating results of ADIG are presented as discontinued operations in the accompanying Unaudited Condensed Consolidated Financial Statements for all periods presented. Refer to Note 3. Discontinued Operations for further discussion.
Following the ADI Spin-Off, Resideo's continuing operations consist of its former Products and Solutions segment. As a result, Resideo's consolidated revenue, operating income, and cash flows have been materially reduced and because substantially all of Resideo's outstanding indebtedness (other than the indebtedness Resideo has disclosed transferred to ADIG and indebtedness that Resideo has paid down in connection with the ADI Spin-Off) remains with Resideo, our net leverage ratio on a standalone basis is expected to be higher than the consolidated leverage ratio reported for prior periods.
In connection with the ADI Spin-Off, we have entered into a separation and distribution agreement and certain ancillary agreements including, among others, a transition services agreement, a tax matters agreement, a commercial products purchase agreement, an employee matters agreement, and an intellectual property matters agreement, which govern the relationship of the parties following the ADI Spin-Off.
Results of Operations
The following table represents results of operations on a consolidated basis for the periods indicated:
Three Months Ended Nine Months Ended
(in millions, except per share data and percentages) October 3, 2026 September 27, 2025 October 3, 2026 September 27, 2025
Revenue $ 727 $ 703 $ 2,217 $ 2,108
Cost of goods sold 433 419 1,325 1,270
Gross profit 294 284 892 838
Gross profit % 40.4 % 40.4 % 40.2 % 39.8 %
Operating expenses:
Research and development expenses 37 33 110 91
Selling, general and administrative expenses 159 135 445 403
Intangible asset amortization 6 7 19 21
Restructuring, impairment and extinguishment costs 20 3 43 4
Total operating expenses 222 178 617 519
Operating income 72 106 275 319
Indemnification Agreement expense - - - 972
Other expense (income), net 3 6 (80) 23
Interest expense, net 31 30 97 81
Income (loss) from continuing operations before taxes 38 70 258 (757)
Provision (benefit) for income taxes 7 (20) 88 (22)
Income (loss) from continuing operations, net of taxes 31 90 170 (735)
Income (loss) from discontinued operations, net of taxes (9) 66 (13) 72
Net income (loss) 22 156 157 (663)
Unless otherwise noted, the discussion and analysis below relates to continuing operations and excludes the results of ADI Global Distribution, which are presented as discontinued operations for all periods presented. Revenue from continuing operations has been recast to reflect prior intercompany sales that occurred between Resideo and ADIG as third-party sales.
Revenue
Three months ended
Revenue for the three months ended October 3, 2026 was $727 million, an increase of $24 million, or 3.4%, compared to the same period in 2025. The increase was primarily due to $29 million from favorable price, partially offset by $4 million of unfavorable impacts from foreign currency exchange rates and $2 million from lower sales volume.
Revenue excluding OEM Security of $694 million was up 6.3% compared to $653 million in the third quarter of 2025 and
grew year-over-year across all sales channels and product categories driven by pricing and higher sales volume. OEM Security revenue of $33 million was down 34% compared to sales of $50 million in the third quarter of 2025 due to reduced volumes from a large OEM Security customer.
Nine months ended
Revenue for the nine months ended October 3, 2026 was $2,217 million, an increase of $109 million, or 5.2%, compared to the same period in 2025. The increase was primarily due to $72 million from pricing, $24 million from higher sales volumes, and $14 million favorable impacts from foreign currency exchange rates.
Revenue for the nine months ended October 3, 2026 excluding OEM Security was $2,090 million, an increase of $118 million, or 6.0%, compared to the same period in 2025, driven by pricing, higher sales volumes and favorable impacts of foreign exchange rates. OEM Security revenue of $127 million was down 7% compared to $136 million in the same period in 2025 due to reduced volumes from a large OEM Security customer.
Gross Profit
Three months ended
The chart below presents the drivers of the gross profit variance from the three months ended September 27, 2025 to the three months ended October 3, 2026.
Gross profit for the three months ended October 3, 2026 was $294 million, an increase of $10 million, or 3.5%, compared to the same period in 2025, as shown in the above waterfall.
Gross margin rate for the three months ended October 3, 2026 was 40.4%, an increase of 4 basis points compared to the same period in 2025. The impact of 230 bps from higher manufacturing costs was offset by 90 bps from tariff refunds, 60 bps from net favorable price and mix shift, 40 bps from higher margins on new volumes, 30 bps from a shift in expenditures resulting in lower maintenance costs and higher research and development qualifying spend, and 10 bps from foreign currency exchange rates.
Nine months ended
The chart below presents the drivers of the gross profit variance from the nine months ended September 27, 2025 to the nine months ended October 3, 2026.
Gross profit for the nine months ended October 3, 2026 was $892 million, an increase of $54 million, or 6.4%, compared to the same period in 2025, as shown in the above waterfall.
Gross margin rate for the nine months ended October 3, 2026 was 40.2%, an increase of 40 bps as compared to the same period in 2025. The increase was primarily driven by a 60 bps benefit from tariff refunds, 40 bps from a shift in expenditures resulting in lower maintenance costs and higher research and development qualifying spend, and 30 bps from higher margins on new sales volumes. The increase was partially offset by higher manufacturing costs of 70 bps, net unfavorable price and mix margin impact of 10 bps, and 10 bps from foreign currency exchange rates.
Research and Development Expenses
Three months ended
Research and development expenses for the three months ended October 3, 2026 were $37 million, an increase of $4 million, or 12.1%, compared to the same period in 2025. The increase was driven by incremental headcount and third-party services to develop and introduce new products into the market.
Nine months ended
Research and development expenses for the nine months ended October 3, 2026 were $110 million, an increase of $19 million, or 20.9%, compared to the same period in 2025. The increase was driven by incremental headcount and third-party services to develop and introduce new products into the market.
Selling, General and Administrative Expenses
Three months ended
Selling, general and administrative expenses for the three months ended October 3, 2026 were $159 million, an increase of $24 million, or 17.8%, compared to the same period in 2025. The increase was primarily driven by $30 million of third-party advisory and other costs incurred in connection with the ADI Spin-off, partially offset by $6 million of lower people costs.
Nine months ended
Selling, general and administrative expenses for the nine months ended October 3, 2026 were $445 million, an increase of $42 million, or 10.4%, compared to the same period in 2025. The increase was primarily driven by $30 million of third-party advisory and other costs incurred in connection with the ADI Spin-off, $24 million of legal settlements and $5 million of unfavorable foreign currency exchange rate impacts, partially offset by $17 million lower operating costs including people costs, bad debt, and third-party spend.
Intangible Asset Amortization
Three months ended
Intangible asset amortization for the three months ended October 3, 2026 was $6 million, a decrease of $1 million, or 14.3%, compared with the same period in 2025.
Nine months ended
Intangible asset amortization for the nine months ended October 3, 2026 was $19 million, a decrease of $2 million, or 9.5%, compared with the same period in 2025.
Restructuring, Impairment, and Extinguishment Costs
Three months ended
Restructuring expenses for the three months ended October 3, 2026 were $20 million, an increase of $17 million, compared to the same period in 2025. The increase was driven by $7 million of incremental debt modification and extinguishment costs, $7 million of employee termination costs related to transformation initiatives and a $3 million impairment of an equity method investment.
Nine months ended
Restructuring expenses for the nine months ended October 3, 2026 were $43 million, an increase of $39 million compared to the same period in 2025. The increase was primarily driven by $24 million of employee termination costs related to ongoing transformation initiatives, $12 million of expense associated with debt modifications and extinguishment, and a $3 million impairment of an equity method investment.
Indemnification Agreement Expense
Three months ended
We incurred no Indemnification Agreement expense for the three months ended October 3, 2026, consistent with the same period of 2025, reflecting the termination of the Indemnification Agreement with Honeywell on July 30, 2025.
Nine months ended
We incurred no Indemnification Agreement expense for the nine months ended October 3, 2026, a decrease of $972 million compared to the same period of 2025. The decrease was driven by the termination of the Indemnification Agreement with Honeywell on July 30, 2025.
Other (Income) Expense, Net
Three months ended
Other expense, net for the three months ended October 3, 2026 was $3 million, a decrease of $3 million, compared to the same period in 2025. The decrease was primarily attributable to $3 million of favorable impacts from foreign exchange rates compared to the prior period.
Nine months ended
Other income, net for the nine months ended October 3, 2026 was $80 million, an increase of $103 million, compared to the same period in 2025. The increase was primarily attributable to a $77 million benefit recognized in the current year in connection with the settlement and termination of the Honeywell Tax Matters Agreement with Honeywell, a $23 million favorable impact of foreign exchange rates compared to the prior period, and a $4 million gain in the current year on the sale of certain assets.
Interest Expense, Net
Three months ended
Interest expense, net for the three months ended October 3, 2026 was $31 million, an increase of $1 million, or 3.3%, compared to the same period in 2025. The increase was primarily driven by higher outstanding debt.
Nine months ended
Interest expense, net for the nine months ended October 3, 2026 was $97 million, an increase of $16 million, or 19.8%, compared to the same period in 2025. The increase was primarily driven by higher outstanding debt.
Tax Expense
Three months ended
Income tax expense for the three months ended October 3, 2026 was $7 million, an increase of $27 million or 135.0%, compared to the same period in 2025. The increase was primarily driven by an increase in the effective tax rate, partially offset by a $32 million decrease in income before taxes.
The effective income tax rate increased from (28.6)% to 18.4%, primarily driven by an increase in projected income before taxes for the year, partially offset by the elimination of the one-time non-deductible Indemnification Agreement expense, and the mix of earnings across the jurisdictions in which we operate.
Nine months ended
Income tax expense for the nine months ended October 3, 2026 was $88 million, an increase of $110 million or 500.0%, compared to the same period in 2025. The increase was primarily driven by an increase in projected income before taxes for the year and an increase in the effective tax rate.
The effective income tax rate increased from 2.9% to 34.1%, primarily driven by an increase in projected income before taxes for the year, partially offset by the elimination of the one-time non-deductible Indemnification Agreement expense, the mix of earnings across the jurisdictions in which we operate, and the derecognition of certain deferred tax assets related to the settlement of the Honeywell Tax Matters Agreement.
Income from Discontinued Operations, Net of Taxes
Three months ended
For the three months ended October 3, 2026, the loss from discontinued operations, net of taxes, was $9 million, reflecting $1 million operating loss, $6 million of interest expense and $4 million of other expense, partially offset by a $2 million income tax benefit. Operating loss included $9 million of business separation costs incurred in connection with the ADI Spin-Off.
Nine months ended
Loss from discontinued operations, net of taxes, for the nine months ended October 3, 2026 was $13 million, reflecting operating income of $29 million, more than offset by $33 million of interest expense, $6 million of other expense and $3 million of income tax expense. Operating income included $64 million of business separation costs incurred in connection with the ADI Spin-Off.
Liquidity and Capital Resources
As of October 3, 2026, we had $229 million of cash and cash equivalents, of which 52% were held by foreign subsidiaries. Our liquidity is primarily dependent on our ability to continue to generate positive cash flows from operations, supplemented by external sources of capital as needed. Additional liquidity may also be provided through access to the capital markets and our senior secured revolving credit facility in an aggregate principal amount of $500 million.
Liquidity
Our future capital requirements will depend on many factors, including acquisition or strategic transactions we may enter into, the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies, and the expansion of our sales and marketing activities. While we may elect to seek additional funding at any time, we believe our existing cash, cash equivalents, and availability under our credit facilities are sufficient to meet our capital requirements for the foreseeable future.
We may from time to time take steps to reduce our debt or otherwise improve our financial position. These actions could include prepayments, open market debt repurchases, negotiated repurchases, other redemptions or retirements of outstanding debt, opportunistic refinancing of debt, raising additional capital and equity, or divesting certain assets. The amount of prepayments or the amount of debt that may be refinanced, repurchased, or otherwise retired, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.
Second A&R Credit Agreement and Senior Unsecured Notes
On June 4, 2026, we amended our A&R Credit Agreement in order to facilitate the ADI Spin-Off and extend the revolver for a new 5-year term, now due 2031 (the "Second A&R Credit Agreement"). Following the amendment, our Second A&R Credit Agreement continues to provide an important source of liquidity and financial flexibility, subject to the terms, conditions and covenants contained therein.
Upon consummation of the ADI Spin-Off on August 3, 2026, a one-time cash dividend of $900 million was made from ADIG to Resideo. Following the ADI Spin-Off, we have prioritized reducing outstanding indebtedness and strengthening our balance sheet. The proceeds received from ADIG were used to repay $518 million of senior secured term loans that were to mature in February 2028 and $382 million of senior secured term loans maturing in June 2031. On October 2, 2026, we made an additional repayment of $200 million of the senior secured term loans maturing in June 2031 following the completion of the post-closing cash adjustment contemplated by the separation and distribution agreement. Our debt repayments are expected to reduce future interest expense while preserving liquidity for our ongoing operating and capital requirements.
The 4.000% Senior Notes due 2029 and the 6.500% Senior Notes due 2032 are senior unsecured obligations of Resideo guaranteed by Resideo's existing and future domestic subsidiaries and rank equally with all of Resideo's senior unsecured debt.
As of October 3, 2026, we had interest rate swaps with a notional value of $140 million. Our interest rate swaps are designated as cash flow hedges of the variability in interest payments associated with a portion of our variable-rate debt equal to the swap notional amount, effectively converting the hedged debt from a variable interest rate based on Term SOFR to a fixed rate over the remaining term to maturity in February 2027.
As of October 3, 2026, we were in compliance with all covenants related to the Second A&R Credit Agreement, Senior Notes due 2029, and Senior Notes due 2032.
Refer to Note 12. Long-Term Debt and Note 13. Fair Value for a description of our debt obligations and the timing of future principal and interest payments, including impacts from our interest rate derivatives.
Common Share Repurchase Program
In August 2023, we announced that our Board of Directors authorized a share repurchase program for the repurchase of up to $150 million of our common stock over an unlimited time period. During the three and nine months ended October 3, 2026, there were no common share repurchases. As of October 3, 2026, we had approximately $108 million of authorized repurchases remaining under the Share Repurchase Program.
Summary of Cash Flows from Continuing Operations for the Nine Months Ended October 3, 2026 and September 27, 2025
Our continuing operations cash flows provided by or used in operating, investing, and financing activities for the nine months ended October 3, 2026 and September 27, 2025 are summarized as follows and discussed below:
Nine Months Ended
(in millions) October 3, 2026 September 27, 2025 $ change
Cash provided by (used for):
Operating activities of continuing operations $ 111 $ (1,456) $ 1,567
Investing activities of continuing operations (52) (43) (9)
Financing activities of continuing operations (285) 1,167 (1,452)
Net cash provided by operating activities for the nine months ended October 3, 2026 was $111 million, compared to cash used in operating activities of $1,456 million in the same period in 2025. The $1,567 million increase in cash provided by operating activities was primarily driven by an increase in net income of $905 million, non-cash adjustments of $115 million, and a $635 million net favorable change related to settlement of the Honeywell Tax Matters Agreement and the Indemnification Agreement. This was partially offset by an $84 million unfavorable change in working capital. The favorable change in non-cash adjustments related primarily to a $70 million increase in deferred income taxes related to the settlement of the Honeywell Tax Matters Agreement, and $39 million of higher restructuring expenses. The unfavorable change in working capital is primarily attributable to $93 million from accounts receivable related to increased sales and
$71 million from higher inventory levels to support the business, partially offset by a $61 million increase in accounts payable and accrued liabilities.
Net cash used for investing activities for the nine months ended October 3, 2026 was $52 million, compared to $43 million of cash used in the same period in 2025. The $9 million greater use of cash in the current period was due to a $19 million increase in capital expenditures in 2026 to enhance our operations, partially offset by a $10 million source of cash from other investing activities in the current year, consisting primarily of proceeds from asset sales.
Net cash used for financing activities during the nine months ended October 3, 2026 was $285 million, compared to $1,167 million of cash provided by financing activities in the same period in 2025. The $1,452 million greater use of cash in the current year was driven by $1,198 million prior-year proceeds from new debt issuance, $1,106 million higher current-year debt repayments, $39 million cash used to acquire treasury stock in connection with stock award withholdings, and $20 million cash paid to ADI in the third quarter of 2026 in connection with the ADI Spin-off, partially offset by a $900 million one-time cash dividend received from ADI upon consummation of the ADI Spin-off.
Contractual Obligations and Probable Liability Payments
In addition to our long-term debt discussed above, our material cash requirements include the following contractual obligations.
Environmental Liability
We make environmental liability payments for sites which we own and operate. As of October 3, 2026, a liability of $22 million was deemed probable and reasonably estimable.
Operating Lease
We have operating lease arrangements for the majority of our branches, distribution centers, manufacturing sites, offices, engineering, lab, storage sites, automobiles, and certain equipment. As of October 3, 2026, we had operating lease payment obligations of $85 million, with $21 million payable within 12 months.
Other Matters
Litigation, Environmental Matters, and the Indemnification Agreement
Refer to Note 15. Commitments and Contingencies for further discussion.
Recent Accounting Pronouncements
Refer to Note 2. Summary of Significant Accounting Policies for further discussion.
Resideo Technologies Inc. published this content on November 10, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 10, 2026 at 21:58 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]