Analogy 1: Imagine **Google Nest** (for smart home products like thermostats and security) combined with a specialized **Home Depot Pro** (as a wholesale distributor for professional installers of these and other low-voltage technologies).

Analogy 2: The home comfort and security division that spun out of **Honeywell**, which also acts like a B2B **Amazon** for professional technology installers.

• Smart Thermostats: Devices that intelligently control home heating and cooling, offering features like remote access and energy management.
• Home Security Systems: Integrated solutions comprising sensors, cameras, and control panels for intrusion detection and comprehensive home protection.
• Water Leak Detection & Shutoff: Products designed to detect water leaks and can automatically shut off the water supply to mitigate potential damage.
• Air Quality Monitors: Devices that measure and report on indoor air quality, identifying pollutants for healthier living environments.
• Residential Fire & CO Detection: Alarms and detectors providing early warning for smoke, fire, and carbon monoxide hazards in homes.
• Security Monitoring Services (via partners): Provision of underlying technology and platforms that support professional security monitoring services delivered through their extensive dealer network.

For Resideo Technologies (symbol: REZI), the company primarily sells to other companies (B2B).

Its major identified customer is:

• Amazon.com, Inc. (AMZN)

According to Resideo's annual report (10-K) for 2023, sales to Amazon.com, Inc. accounted for approximately 11% of Resideo's net revenues.

Resideo also sells its products through a variety of other channels to other companies, including:

• Security dealers
• HVAC and plumbing contractors
• Professional electrical distributors
• Other retail channels (such as mass merchants and hardware stores)

Furthermore, its ADI Global Distribution business primarily serves a highly fragmented customer base consisting of numerous small and medium-sized dealers and installers of low-voltage products.

The clear emerging threat to Resideo Technologies (REZI) is the accelerating dominance of integrated smart home ecosystems and AI platforms controlled by large technology companies such as Amazon (Alexa, Ring), Google (Google Home, Nest), and Apple (HomeKit).

These tech giants are not merely competitors; they are reshaping the foundational architecture of the smart home market by:

• Setting the standard for user experience: Consumers are increasingly prioritizing seamless integration, voice control, and cloud-based services provided by these platforms. This shifts the locus of value away from individual hardware components and towards the overarching ecosystem.
• Commoditizing hardware: As platform compatibility becomes paramount, the unique features and branding of traditional smart home hardware providers like Resideo's Honeywell Home products face significant pressure. Many generic or platform-specific devices offer comparable functionality at lower price points, reducing the perceived value and differentiation of Resideo's offerings.
• Driving subscription-based services: These platforms often integrate or acquire security and smart home companies that offer compelling subscription models for monitoring, cloud storage, and advanced features, potentially displacing Resideo's more hardware-centric revenue streams and challenging its professional channel's ability to compete on total cost and integrated features.
• Threatening distribution channels: While Resideo's ADI Global Distribution business serves professional installers, the integrated tech giants can increasingly facilitate direct sales or form partnerships that bypass traditional distribution, potentially eroding ADI's market share and margins over time.

This dynamic mirrors how Apple's iPhone created a comprehensive mobile ecosystem that rendered hardware-focused competitors like Research In Motion's BlackBerry obsolete, or how Netflix's content and delivery platform disrupted traditional video rental businesses.

Resideo Technologies (NYSE: REZI) operates in two primary business segments, each with significant addressable markets.

• Products & Solutions Segment: This segment, which manufactures residential controls and sensing solutions, operates in a serviceable addressable market exceeding $40 billion. This market is considered global, given Resideo's worldwide operations and product presence in over 150 million households internationally.
• ADI Global Distribution Segment: Resideo's wholesale distribution business for security and audio-visual products, ADI Global Distribution, serves a serviceable addressable market greater than $30 billion. This market is also global, as ADI operates through a network of over 200 locations worldwide.

Expected Drivers of Future Revenue Growth for Resideo Technologies (REZI)

Over the next 2-3 years, Resideo Technologies (REZI) is expected to drive revenue growth through several key initiatives and market improvements:

1. New Product Introductions and Expansion of Connected Home Solutions: Resideo is focused on introducing differentiated new products across its connected home portfolio, which is anticipated to be a significant driver of future growth. Examples include the First Alert combined smoke and CO connected detectors and the new Premium Elite Pro Honeywell Home smart thermostats. The company also plans to expand into advanced HVAC controls, safety devices, and water-sensing technologies. This strategic focus on innovation and product development is expected to capitalize on emerging trends in smart living and IoT.
2. Resolution of HVAC Market Disruptions: Current headwinds in the HVAC market, which have impacted Resideo's revenue, are largely considered transitory and are expected to resolve by the first quarter of 2026. This normalization of the HVAC market is anticipated to lead to above-consensus organic revenue growth in 2026 as inventory disruptions subside and market stability returns.
3. Organic Growth within Products & Solutions and ADI Global Distribution Segments: Resideo has demonstrated low single-digit organic revenue growth year-over-year in both its Products and Solutions and ADI Global Distribution business segments. The company projects an increase in organic revenue for 2026 that is above current analyst predictions, indicating continued growth in its core markets and customer base. ADI Global Distribution is also experiencing solid growth in strategic focus areas such as DataCom and ProAV businesses.
4. Price Realization: Resideo has leveraged price realization as a factor contributing to revenue growth, particularly in its Products and Solutions segment. Management also plans to implement further phased price increases to offset potential tariffs or cost inflation, aiming to maintain gross profit dollars and contribute to top-line growth.
5. Strategic Acquisitions and Operational Enhancements: The integration of the Snap One acquisition at ADI is progressing ahead of schedule and is expected to exceed synergy targets, broadening the pro-audio/video portfolio and contributing to growth. Additionally, the completion of the ERP system implementation at ADI, which caused some temporary headwinds, is expected to be finalized by the end of 2025, removing operational challenges and supporting smoother revenue generation. The planned separation of the ADI and Products & Solutions businesses in the second half of 2026 is also intended to unlock value and enhance operational performance and strategic flexibility for both entities, thereby supporting their individual growth trajectories.

Share Repurchases

• In August 2023, Resideo Technologies announced a share repurchase program authorizing the company to repurchase up to $150 million of its outstanding common stock. This program has no expiration date.

Share Issuance

• In November 2020, Resideo Technologies commenced an underwritten public offering of 17,000,000 shares of its common stock. The net proceeds from this offering were intended for the repayment of borrowings under its revolving credit facility and for general corporate purposes, including funding growth investments and potential acquisitions.

Outbound Investments

• In August 2025, Resideo made a one-time cash payment of $1.59 billion to Honeywell to terminate all future monetary obligations under the Honeywell Indemnification Agreement, eliminating ongoing quarterly payments of $35 million until 2043. This payment was financed by a combination of new senior secured debt financing and cash on hand.
• The company's revenue growth in fiscal year 2025 is expected to be driven, in part, by the Snap One acquisition, which occurred on June 14, 2024.

Capital Expenditures

• Resideo Technologies projects capital expenditures for the full year 2025 to be in the range of $128 million to $133 million.
• For the trailing twelve months ended June 2025, cash flow for capital expenditures was -$95.00 million.
• Capital expenditures are primarily focused on targeted investments to drive future growth, accelerate growth in attractive categories, and for systems upgrades to support expected growth and improve information visibility.