Resideo to split into two companies, expects strong Q2 results

SCOTTSDALE, Ariz. - Resideo Technologies, Inc. (NYSE:REZI) announced Wednesday its plan to separate its ADI Global Distribution business through a tax-free spin-off to shareholders, creating two independent public companies. The move comes as corporate separations continue to reshape the industrial technology landscape.

The separation, expected to be completed in the second half of 2026, will result in Resideo’s Products & Solutions business continuing to operate under the Resideo name, while ADI becomes a standalone public company.

"At Resideo, we have instilled strong operational discipline across the enterprise, resulting in independence for each of ADI and P&S," said Jay Geldmacher, Resideo’s President and CEO, in a press release statement.

Following the separation, Tom Surran will lead Resideo, which focuses on residential controls and sensing solutions, while Rob Aarnes will head ADI, a wholesale distributor of low-voltage products. Geldmacher’s previously announced retirement will become effective upon completion of the separation.

In the twelve months ended March 29, 2025, the Products & Solutions segment generated $2.6 billion in revenue with a 24.2% adjusted EBITDA margin, while ADI delivered $4.5 billion in revenue with a 7.5% adjusted EBITDA margin.

Separately, Resideo announced an agreement with Honeywell International Inc. (NASDAQ:HON) to eliminate all future obligations under their Indemnification and Reimbursement Agreement through a one-time cash payment of $1.59 billion in the third quarter of 2025. According to InvestingPro, Honeywell maintains a strong market position with a $141 billion market capitalization and has demonstrated consistent dividend growth for 14 consecutive years. The company’s financial health score is rated as "FAIR" by InvestingPro analysts.

The company also reported that it expects its second quarter 2025 financial results to exceed the high end of its previously provided outlook for revenue, adjusted EBITDA, and adjusted earnings per share. Resideo anticipates reporting approximately $750 million in total cash as of June 28, 2025.

The separation is subject to final board approval, regulatory clearances, and other customary conditions. It does not require shareholder approval. For investors seeking deeper insights into Honeywell’s financial position and growth prospects, InvestingPro offers comprehensive analysis, including 10+ additional ProTips and detailed valuation metrics in their Pro Research Report, available exclusively to subscribers.

In other recent news, Honeywell International Inc. reported its second-quarter 2025 earnings, surpassing analyst expectations with an adjusted earnings per share (EPS) of $2.75, compared to the forecast of $2.66. Revenue also exceeded predictions, reaching $10.4 billion against the anticipated $10.05 billion. Meanwhile, Resideo Technologies, Inc. announced an agreement with Honeywell to eliminate all future monetary obligations under their 2018 Indemnification and Reimbursement Agreement with a one-time payment of $1.59 billion, scheduled for the third quarter of 2025. This agreement will terminate Resideo’s obligation to make annual payments to Honeywell of up to $140 million through 2043. In related developments, JPMorgan has raised its price target on Honeywell to $222 from $217, maintaining a Neutral rating on the stock. The adjustment followed Honeywell’s quarterly results, which JPMorgan noted allowed the company to meaningfully raise guidance. These developments indicate significant financial maneuvers and analyst adjustments impacting both Honeywell and Resideo.

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