NYSE:REZI
RESIDEO TECHNOLOGIES, INC.
A diversified smart home and energy technology platform generating billions in annual revenue but currently facing significant profitability headwinds.
Key Metrics
Investment Thesis
Bull Case
Resideo offers compelling value for growth investors seeking exposure to the expanding smart home ecosystem with minimal competition in specific utility-linked niches, while its massive installed base of over 50 million devices provides a stable recurring revenue foundation once profitability recovers. The recent revenue expansion from $6.37B in 2022 to $7.47B suggests strong market penetration and potential for margin improvement as the company scales its software services.
Bear Case
The investment case is severely undermined by a massive net loss of $527M and a cash burn rate exceeding $1B from operations, raising serious concerns about capital allocation and the sustainability of current business models. With long-term debt standing at $3.17B against only $662M in cash and equivalents, the company carries significant refinancing risk in a high-rate environment that could trigger a liquidity crisis if earnings do not stabilize quickly.
About RESIDEO TECHNOLOGIES, INC.
Resideo Technologies, Inc. (REZI) is a leading technology solutions provider serving residential and commercial markets across North America. The company delivers smart home products, energy management systems, and security solutions through its diverse portfolio of acquired brands and proprietary software. Its primary revenue streams stem from sales of connected devices, monitoring services, and software licensing to homeowners, property managers, and utility companies.
Analysis
Management Discussion
Despite generating $7.47B in revenue for the latest period, the company reported a net loss of $527M driven by non-operating losses totaling $1.06B and significant changes in working capital. While operating profit remained positive at $607M, the cash flow from operations turned negative at -$1.14B, indicating heavy investment or timing differences in receivables and inventory management that warrant close monitoring.
Industry Overview
The global smart home and energy management industry is experiencing rapid growth driven by consumer demand for automation, climate change mitigation efforts, and utility incentives for energy efficiency. However, the sector remains cyclical and sensitive to economic downturns that reduce discretionary spending on premium technology upgrades and new construction projects.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $6.37B | $6.24B | $6.76B | $7.47B |
| Cost of Revenue | $4.60B | $4.55B | $4.86B | $5.28B |
| Gross Profit | $1.77B | $1.70B | $1.90B | $2.20B |
| Operating Expenses | $1.16B | $1.15B | $1.38B | $1.59B |
| Operating Income | $611.0M | $547.0M | $520.0M | $607.0M |
| R&D | $111.0M | $109.0M | $111.0M | $167.0M |
| G&A | $974.0M | $960.0M | $1.14B | $1.27B |
| Stock-Based Comp | $50.0M | $44.0M | $59.0M | $57.0M |
| D&A | $94.0M | $98.0M | $144.0M | $195.0M |
| Depreciation | $59.0M | $59.0M | $64.0M | $73.0M |
| Amortization | $35.0M | $38.0M | $80.0M | $122.0M |
| Other OpEx | $70.0M | $80.0M | $132.0M | $156.0M |
| Non-Operating Income | $-193.0M | $-234.0M | $-299.0M | $-1.06B |
| Pre-Tax Income | $418.0M | $313.0M | $221.0M | $-457.0M |
| Income Tax | $135.0M | $103.0M | $105.0M | $70.0M |
| Continuing Ops | $283.0M | $210.0M | $116.0M | $-527.0M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $283.0M | $210.0M | $116.0M | $-527.0M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $283.0M | $210.0M | $116.0M | $-527.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $2.50B | $2.74B | $3.17B | $3.36B |
| Cash & Equivalents | $326.0M | $636.0M | $692.0M | $661.0M |
| Inventory | $975.0M | $941.0M | $1.24B | $1.35B |
| Other Current Assets | $1.20B | $1.17B | $1.24B | $1.34B |
| Long-Term Assets | $3.88B | $3.90B | $5.03B | $5.08B |
| PP&E (Net) | $366.0M | $390.0M | $410.0M | $447.0M |
| Intangibles | $475.0M | $461.0M | $1.18B | $1.09B |
| Goodwill | $2.72B | $2.71B | $3.07B | $3.10B |
| Operating Leases | $191.0M | $192.0M | $248.0M | $327.0M |
| Other LT Assets | $129.0M | $154.0M | $121.0M | $110.0M |
| Total Assets | $6.39B | $6.64B | $8.20B | $8.43B |
| Current Liabilities | $1.55B | $1.52B | $1.79B | $1.75B |
| Accounts Payable | $894.0M | $905.0M | $1.07B | $1.13B |
| Current Debt | $12.0M | $12.0M | $6.0M | $18.0M |
| Current Leases | $37.0M | $39.0M | $51.0M | $57.0M |
| Deferred Revenue | $98.0M | $104.0M | $29.0M | — |
| Other Current Liab | $-135.0M | $-143.0M | $-93.0M | $-75.0M |
| Long-Term Liabilities | $2.31B | $2.37B | $3.10B | $3.76B |
| Long-Term Debt | $1.40B | $1.40B | $1.98B | $3.17B |
| LT Operating Leases | $166.0M | $166.0M | $212.0M | $289.0M |
| Other LT Liab | $742.0M | $809.0M | $905.0M | $305.0M |
| Total Liabilities | $3.86B | $3.90B | $4.89B | $5.52B |
| Shareholders' Equity | $2.53B | $2.75B | $3.31B | $2.92B |
| Paid-In Capital | $2.18B | $2.23B | $2.31B | $2.39B |
| Retained Earnings | $600.0M | $810.0M | $907.0M | $345.0M |
| AOCI | $-212.0M | $-194.0M | $-284.0M | $-157.0M |
| Treasury Stock | $35.0M | $93.0M | $111.0M | $144.0M |
| Total L&E | $6.39B | $6.64B | $8.20B | $8.43B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $283.0M | $210.0M | $116.0M | $-527.0M |
| Non-Cash Adjustments | $-258.0M | $256.0M | $43.0M | $-701.0M |
| Working Capital Changes | $127.0M | $-26.0M | $285.0M | $91.0M |
| Cash from Operations | $152.0M | $440.0M | $444.0M | $-1.14B |
| Capital Expenditures | $85.0M | $105.0M | $80.0M | $116.0M |
| Cash from Investing | $-764.0M | $-44.0M | $-1.41B | $-39.0M |
| Debt Issuances | $200.0M | $0 | $1.18B | $1.20B |
| Debt Repayments | $12.0M | $12.0M | $605.0M | $9.0M |
| Share Buybacks | — | $41.0M | $1.0M | $0 |
| Cash from Financing | $170.0M | $-64.0M | $1.03B | $1.13B |
| FX Effect | $-8.0M | $-24.0M | $-10.0M | $17.0M |
| Net Change in Cash | $-450.0M | $308.0M | $56.0M | $-31.0M |
| Beginning Cash | $779.0M | $329.0M | $637.0M | $693.0M |
| Ending Cash | $329.0M | $637.0M | $693.0M | $662.0M |
Frequently Asked Questions
How does RESIDEO TECHNOLOGIES, INC. make money?
The company operates through three main segments: Smart Home Products which includes thermostats, locks, and cameras; Energy Management Solutions offering HVAC controls and demand response software for utilities; and Security & Safety providing video surveillance and monitoring services to residential and commercial clients.
What are the main risks for REZI?
The company faces significant interest rate sensitivity due to its substantial long-term debt load relative to cash reserves, potential margin compression from rising component costs in the semiconductor supply chain, regulatory risks associated with privacy laws governing smart home data, and execution risk as it integrates complex legacy technologies into a modern software platform.
What is REZI's competitive advantage?
Resideo benefits from a vast installed base of connected devices creating high switching costs, strong brand recognition through its portfolio of legacy brands, and deep utility partnerships that provide exclusive access to energy efficiency programs and rebate data.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.