Resideo: 3 key takeaways for long-term investors. Management is betting on branded hardware over third-party OEM work, a shift that could reshape margins for years to come. Key points. * Resideo reported third-quarter 2026 revenue of $727 million. * Core sales channels grew revenue by 6% year over year. * Management repaid $1.1 billion of gross debt in third quarter. * Motley Fool Issues Rare "Total Conviction" Buy Alert" On its third-quarter 2026 earnings call, held on Nov. 10, 2026, Resideo (REZI -2.99%) reported total revenue of $727 million, growing 3% year over year despite broader housing market headwinds. The company's post-spin focus as a stand-alone product business demonstrates how pricing power in core sales channels drives profitability. Three things management said stand out. 1. Shifting capital away from low-margin OEM contracts. Resideo is scaling back its original equipment manufacturer (OEM) security business, in which it manufactures products for third parties that compete with its own brand at lower margins. Expanding higher-margin core sales channels protects profitability over the long term. The Motley Fool, LLC has shifted its strategic focus on security products, including investments in operating expenses away from OEM security toward its branded products for 2 key reasons. - Thomas Surran, Chief Executive Officer 2. Building a reinvestment flywheel around differentiated hardware. Management uses cost discipline and higher-priced product launches to expand margins. The resulting cash flows straight back into research and development (R&D), creating a self-sustaining growth cycle for its core home safety and heating, ventilation, and air conditioning (HVAC) products. Its strategy is built around a powerful self-reinforcing cycle, investing in innovation to drive revenue growth, expanding margins through differentiated product design, continuously improving operational efficiency and reinvesting the benefits back into its innovation engine. - Thomas Surran, Chief Executive Officer 3. Aggressively paying down debt Following corporate spin-off. Following the August spin-off of ADI Distribution (ADI), its former security distribution arm, Resideo directed immediate capital allocation toward balance sheet health. Generating cash while shrinking debt lowers interest expense and improves financial flexibility. After receiving a onetime $900 million dividend from the spin-off of ADI, The Motley Fool, LLC repaid $1.1 billion of gross debt in the third quarter. - Shane Harrison, Chief Financial Officer Looking ahead. Core channel momentum remains steady as product pipelines deliver. Management is countering input cost inflation through price increases and site consolidations while expanding software capabilities. The strong pipeline of product innovation is just beginning to deliver, and the company is filled with incredibly talented and passionate people who are energized by the opportunity to operate as a stand-alone product-focused company. - Shane Harrison, Chief Financial Officer Software platform investments and core hardware focus support future expansion. Operational efficiency gains help fund engineering work. The Motley Fool, LLC believe this self-reinforcing cycle will be a powerful driver of sustainable growth, margin expansion and long-term shareholder value. - Thomas Surran, Chief Executive Officer Should you buy stock in Resideo Technologies right now? Before you buy stock in Resideo Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Resideo Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of its recommendation, you'd have $344,878!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of its recommendation, you'd have $1,097,846!* Now, it's worth noting Stock Advisor's total average return is 851% - a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. *Stock Advisor returns as of November 11, 2026.

REZI Q3 2026 deep dive: new product momentum offsets OEM security decline, cautious outlook persists. Jabin bastian /. November 10, 2026 Home automation and security solutions provider Resideo Technologies (NYSE:REZI) reported Q3 2026 results topping the market's revenue expectations, but sales fell by 61% year on year to $727 million. On the other hand, next quarter's revenue guidance of $720 million was less impressive, coming in 2.5% below analysts' estimates. Its non-GAAP profit of $0.52 per share was 28.9% above analysts' consensus estimates. Resideo (REZI) Q3 2026 highlights: * Revenue $727 million vs S&P analyst consensus of $712.9 million (61% year-on-year decline, 2% beat) * Adjusted EPS $0.52 vs S&P analyst consensus of $0.40 (28.9% beat) * Adjusted EBITDA $154 million vs analyst estimates of $148.4 million (21.2% margin, 3.8% beat) * Revenue guidance $720 million at the midpoint for Q4 2026, below analyst estimates of $738.6 million * Adjusted EPS guidance $1.95 at the midpoint for the full year, missing analyst estimates by 2.5% * EBITDA guidance $619 million at the midpoint for the full year, below analyst estimates of $677.2 million * Operating margin 9.9%, up from 8.3% in the same quarter last year * Market capitalization $2.95 billion StockStory's take. Resideo's third quarter was marked by a sharp year-over-year sales decline, which led to a negative market reaction, but the company's core operations excluding OEM security showed resilience. Management attributed the quarter's performance to solid demand for non-discretionary home automation and safety products, particularly in the retail and professional distribution channels. CEO Tom Surran highlighted robust growth in core segments and noted that new product launches, such as upgraded smoke and carbon monoxide detectors, fueled share gains despite a challenging housing environment. Surran emphasized, "Professional installers are adopting the differentiated products we design and manufacture, resulting in Resideo winning business." Looking ahead, Resideo's guidance reflects a cautious approach, with management pointing to ongoing input cost inflation and limited benefit from tariff refunds as key headwinds. CFO Shane Harrison noted that while recent price increases will be fully realized next quarter, persistent inflation is expected to offset these gains. The company also plans to continue shifting its portfolio away from lower-margin OEM security products toward higher-value branded offerings and software-driven services. Surran stated, "Our execution is rooted in a mindset of continuous improvement... we believe that mindset will be the driving force for Resideo's continued success." Key insights from management's remarks. Management attributed the quarter's results to strong execution in core sales channels, growing product innovation, and a strategic shift away from OEM security to higher-margin branded offerings. * Retail and electrical channel strength: The retail channel posted 15% revenue growth and electrical distribution saw double-digit gains, driven by demand for air and safety products in both single- and multi-family housing despite a soft housing market. * New product traction: Newly launched products, such as the combo smoke and carbon monoxide detector and AI-powered Pro-IQ services, received enthusiastic customer response and contributed to improved margins and installer loyalty. * OEM security exit impact: The company's deliberate shift away from OEM security led to lower sales in that segment, but management believes this will result in a healthier business mix and higher long-term profitability. * Operational improvements: Initiatives like SKU rationalization and facility closures, including the exit from Scotland manufacturing operations, were designed to reduce costs and enhance operational efficiency. * Margin expansion factors: Margin gains were supported by price increases, cost discipline, and a one-time tariff refund, partially offset by inflation and unfavorable product mix. Management also noted that future margin gains will depend on sustaining these initiatives and ongoing product innovation. Drivers of future performance. Management expects near-term growth to be shaped by persistent inflation, new product launches, and the continued emphasis on core branded product and software offerings. * Inflationary pressures remain: CFO Shane Harrison cited ongoing input cost inflation as a headwind, with price increases implemented in June only partially offsetting higher costs. The company anticipates a modest reduction in gross profit dollars next quarter due to the inflationary environment and lack of further tariff refunds. * Product innovation pipeline: Management is prioritizing investment in new products, particularly through the FORTIQ platform and Pro-IQ software suite, which are expected to drive higher-margin sales and deeper installer engagement over time. * Shift toward higher-value segments: Resideo's strategy of moving away from low-margin OEM security sales and focusing on branded, professionally installed products is intended to support more sustainable revenue and margin growth, but the transition may create near-term volatility in reported results. Catalysts in upcoming quarters. In coming quarters, our analysts will be watching (1) the rollout and adoption of new security products on the FORTIQ platform, (2) the impact of operational streamlining initiatives, such as facility closures and SKU rationalization, on margin improvement, and (3) the ability of Resideo's new product pipeline to drive recurring revenue and strengthen installer loyalty. Additionally, any changes in inflationary trends or tariff policies could materially alter the margin outlook. Resideo currently trades at $18.83, down from $19.46 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it's free). Now could be the perfect time to invest in these stocks. WHILE YOU'RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. 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Resideo Technologies (NYSE: REZI) reported third-quarter revenue of $727 million, up 3% year-over-year. Excluding OEM Security, revenue rose 6% to $694 million. It was the company's first quarter after the separation of its ADI distribution business. Gross margin reached 40.4%, the 14th straight quarter of year-over-year expansion. Standalone Adjusted EBITDA rose 5% to $154 million, and Standalone Adjusted diluted earnings per share rose 8% to $0.52. Income from continuing operations fell 66% to $31 million, partly due to $30 million of one-off separation costs. Resideo repaid $1.1 billion of gross debt using a $900 million dividend from ADI and $200 million of cash. Total gross debt now stands at $2.1 billion.