What Happened?
Shares of home automation and security solutions provider Resideo Technologies (NYSE: REZI) jumped 7.5% in the afternoon session after the company reported record second-quarter financial results that beat analyst expectations and raised its full-year guidance. The company posted record revenue of $1.94 billion, a 22% increase from the previous year, and adjusted earnings per share of $0.66. These figures surpassed Wall Street's forecasts. While Resideo recorded a net loss of $825 million, this resulted from a one-time expense to end an agreement with Honeywell. Investors appeared to focus on the strong operational performance, as both its Products and Solutions and ADI segments achieved organic revenue growth. In a sign of confidence, the company also lifted its full-year 2025 financial outlook and announced plans to spin off its ADI business segment.
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What Is The Market Telling Us
Resideo’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 15.6% on the news that the company announced a trio of significant strategic updates, including the planned spin-off of its ADI Global Distribution business, a settlement of its long-term payment obligations with Honeywell, and an optimistic outlook for its second-quarter financial results. The series of announcements included a plan to separate its ADI Global Distribution business into an independent, publicly traded company via a tax-free spin-off. This move was designed to unlock shareholder value and provide greater strategic flexibility for both entities.
Additionally, Resideo reached a definitive agreement with Honeywell to make a one-time cash payment of $1.59 billion, which terminated all future annual payment obligations of up to $140 million. This settled a long-standing financial overhang for the company. Capping off the positive news, Resideo also stated that it expected its second-quarter 2025 financial results for revenue, adjusted EBITDA, and adjusted earnings per share to finish above the high-end of its previously issued guidance, signaling strong underlying business performance.
Resideo is up 24.1% since the beginning of the year, and at $28.27 per share, it is trading close to its 52-week high of $28.52 from July 2025. Investors who bought $1,000 worth of Resideo’s shares 5 years ago would now be looking at an investment worth $2,226.
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