Resideo Technologies, Inc. (REZI): Business Model Canvas [Dec-2025 Updated]

You're digging into Resideo Technologies, Inc.'s business model right now, and honestly, it's a tricky one to map, especially with the planned spin-off of ADI Global Distribution by late 2026 and that hefty $1.59 billion cash payment to Honeywell already in the books. As someone who's spent two decades analyzing these structures, I can tell you the core tension is balancing the high-margin Products & Solutions segment-which hit $661 million in Q3 2025 sales-against the massive distribution engine that brought in $1.203 billion that same quarter. We need to see exactly how these two distinct value streams, from professional integrators to homeowners, fit into the nine building blocks before the company fundamentally changes shape. Dive below for the full, precise breakdown of how Resideo Technologies, Inc. is making its money as of late 2025.

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that underpin Resideo Technologies, Inc.'s operations as of late 2025, especially as they gear up for the ADI spin-off. These partnerships are critical for both the Products & Solutions (P&S) side and the distribution powerhouse, ADI.

Long-term Brand License with Honeywell

The long-term license to use the Honeywell Home brand remains firmly in place, which is a massive asset for the P&S segment. What's more interesting from a financial perspective is the recent major transaction with Honeywell International Inc. Resideo made a one-time cash payment of $1.59 billion in the third quarter of 2025 to accelerate and eliminate all future monetary obligations under a separate Indemnification and Reimbursement Agreement from the 2018 spin-off. Honestly, this clears up a lot of complexity. That agreement previously required annual payments from Resideo to Honeywell of up to $140 million through year-end 2043. Plus, Resideo made its final regularly scheduled payment under that old structure, which was $35 million on July 29, 2025.

Supplier Relationships and ADI Distribution Scale

For the ADI Global Distribution business, supplier relationships are the lifeblood. They distribute a massive catalog of low-voltage products. Here's a quick look at the scale of that distribution engine, based on recent performance:

The growth in exclusive brand sales is also a key partnership metric; in Q2 2025, these sales rose 32% year-over-year, showing the strength of proprietary product lines secured through supplier agreements.

Professional Integrators and Strategic Acquisitions

Resideo Technologies, Inc. relies heavily on professional integrators, a network that was significantly bolstered by the 2024 acquisition of Snap One. This move added smart living solutions and expanded the pro-channel reach. The total all-cash transaction value for Snap One was approximately $1.4 billion. The integration is clearly paying off; Snap One contributed $227 million to ADI's Q1 2025 revenue of $1,121 million. The combined entity serves a vast customer base:

• Global customers served by ADI: Over 100,000.
• Professional installers supported by Resideo P&S: Over 100,000.

Connected Life-Safety Product Partnership with Google Nest

The partnership with Google Nest extends into the connected life-safety space. For instance, Resideo's First Alert SC5 Smart Smoke & Carbon Monoxide Alarm is explicitly designed to work with and replace the 2nd generation Google Nest Protect devices, integrating into the Google Home app. Furthermore, Resideo's Honeywell Home and Google Nest thermostats are leveraged together with partners like CPower and Voltus in demand response programs. For example, in the Ameren Illinois territory (MISO), customers with these devices can earn cash for reducing electricity usage during grid emergencies.

Utility Companies for Demand Response Programs

While the company is focusing its structure, the historical success in energy management shows the value of utility relationships. In 2020, Resideo's energy-saving devices helped customers save 1.2 Billion Kilowatt hours. This capability, often executed through partners like CPower, uses smart thermostats to form virtual power plants to deliver power back to grid operators like PJM Interconnection when reliability is needed. Finance: review the Q3 2025 cash flow statement to confirm the $1.59 billion payment timing relative to operating cash flow guidance.

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Key Activities

You're looking at the core engine of Resideo Technologies, Inc. as it moves toward separating its two major parts. The Key Activities section here is all about the execution-making the products and moving the product through the distribution channel, all while managing a major integration and a planned separation.

Manufacturing and R&D for residential controls and sensing solutions.

This is the Products & Solutions (P&S) side of the house. They are focused on manufacturing and getting those residential controls and sensing solutions out the door. For the third quarter ended September 27, 2025, P&S brought in net revenue of $661 million, which was up 2% year-over-year. Honestly, the operational discipline here is showing up in the margins; the P&S gross margin hit 43.0% in Q3 2025. That's the tenth consecutive quarter of year-over-year margin expansion for P&S. Research and development expenses, which are key for future growth, increased by $10 million in Q3 2025 compared to the prior year's third quarter, reflecting planned investments.

Global wholesale distribution of low-voltage security and AV products.

The ADI Global Distribution segment is the other half of the current structure. This activity involves serving professional integrators with security, fire, and AV products globally. In Q3 2025, ADI's net revenue was $1,203 million, also up 2% year-over-year. The segment achieved a gross margin of 22.6% for the quarter. The activity of growing the digital channel is clearly important, as organic e-commerce net revenue was up 19% year-over-year in Q2 2025. For the last twelve months ending September 27, 2025, the LTM Net Revenue for ADI was $4.79 billion, with an LTM Adjusted EBITDA Margin of 7.6%.

The key distribution performance metrics for the recent quarter look like this:

Integrating Snap One to capture $75 million in run-rate synergies by 2027.

Since acquiring Snap One in mid-2024, a critical ongoing activity is the integration into the ADI segment. Resideo Technologies, Inc. continues to expect annual run-rate business and financial synergies of approximately $75 million by 2027. To be fair, progress is on track; management noted that synergy achievement was ahead of 2025 expectations as of Q2 2025. This integration is designed to expand capabilities across security, audio-visual, and smart living markets.

Developing and launching new energy-efficient smart home products.

This activity directly supports the P&S segment's revenue growth, which was driven by price realization and customer demand for new items. You're seeing strong customer reception for specific new devices:

• Honeywell Home FocusPRO thermostat line demand was strong.
• First Alert SC5 connected smoke and carbon monoxide detectors achieved record highs in sales.

The success of these new launches helps drive the P&S segment's volume and mix, supporting that 43.0% gross margin in Q3 2025.

Executing the strategic plan to spin off ADI Global Distribution by late 2026.

This is a major structural activity for late 2025 and beyond. Resideo Technologies, Inc. announced its intention to separate the ADI business via a tax-free spin-off on July 30, 2025. The expected completion timeline for this separation is the Second Half of 2026 (2HFY26). A significant step taken to enable this was the one-time cash payment of $1.59 billion made to Honeywell in August 2025 to terminate the Indemnification Agreement. That termination immediately unlocked $35 million of quarterly EBITDA, which provides defintely increased strategic and financial flexibility for both the remaining Resideo and the future independent ADI company.

Finance: draft 13-week cash view by Friday.

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Key Resources

You're looking at the core assets Resideo Technologies, Inc. (REZI) relies on to execute its business strategy as of late 2025. These aren't just line items; they are the engines driving revenue and market position.

The foundation of the Products & Solutions (P&S) segment rests on its globally recognized brand portfolio.

• The globally recognized Honeywell Home and First Alert brand portfolio.
• ADI's extensive global distribution network and 100,000+ customer base.
• Proprietary brands like Control4, OvrC, and Araknis Networks (from Snap One).
• Manufacturing facilities, with over 98% of P&S costs in Mexico exempt from tariffs.
• Cash and cash equivalents of $753 million as of June 28, 2025.

Let's break down the scale of the ADI distribution network, which is a massive physical and digital asset for Resideo Technologies, Inc.

The financial resources are also critical, though they fluctuate based on operational cash flow and major transactions. You saw that cash position shrink after a major event, which is important context for near-term liquidity planning.

• Cash and cash equivalents stood at $753 million at June 28, 2025.
• Following the one-time $1.59 billion payment to Honeywell in August 2025 to terminate the Indemnification Agreement, the cash balance was $345 million as of September 27, 2025.
• The P&S segment achieved a gross margin of 43.0% in the third quarter of 2025.
• The P&S segment generated net revenue of $661 million in the third quarter of 2025.

The manufacturing footprint leverages geographic advantages. While the prompt listed a specific tariff exemption percentage, the most recent public data suggests a slightly different, but still very strong, figure related to USMCA benefits for P&S products sold in the US.

The strength of the brand equity, represented by Honeywell Home and First Alert, supports the P&S segment's pricing power, evidenced by its 43.0% gross margin in Q3 2025.

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Value Propositions

You're looking at the core value Resideo Technologies, Inc. delivers across its customer base, which is clearly segmented between professionals and homeowners, especially as the company moves toward its planned 2026 separation of ADI and Products & Solutions (P&S).

For professional integrators, the value centers on distribution efficiency and product depth through ADI Global Distribution.

• One-stop-shop for low-voltage products via ADI's omnichannel model.
• Organic Average Daily Sales growth at ADI was 10% in Q2 2025.
• ADI net revenue reached $1.28 billion in Q2 2025.
• Organic e-commerce net revenue grew 19% year-over-year in Q2 2025.
• Organic Exclusive Brands net revenue increased 32% in Q2 2025.

For homeowners, the proposition is about trusted performance and peace of mind under established brands.

• Trusted comfort, security, and life-safety under premium brands like Honeywell Home and First Alert.
• The Honeywell Home brand is America's No. 1 most trusted thermostat brand based on a April 2025 survey.
• New product demand drove P&S organic revenue growth of 5% in Q2 2025.
• The First Alert SC5 connected smoke and CO detector saw strong point of sale volumes in Q2 2025.

Energy efficiency is a concrete benefit tied to specific product lines, like thermostats.

• The Honeywell Home X2S smart thermostat, launched in Spring 2025, is ENERGY STAR® certified.
• This certified thermostat is projected to offer energy savings of 22% for heating and 17% for cooling.
• Honeywell Home smart thermostat users, on average, save about $204 annually when consistently using the recommended scheduling feature.
• The P&S segment also launched new Energy Star rated indoor air quality products in Q3 2025.

Margin performance reflects the value captured through product mix and operational discipline, particularly in the P&S segment.

Here's the quick math on segment financial performance for Q2 2025:

The P&S segment offers high-margin products, evidenced by its margin performance.

• P&S gross margin was 42.9% in Q2 2025.
• This marked the ninth consecutive quarter of year-over-year gross margin improvement for P&S.
• ADI gross margin expanded by 280 basis points year-over-year in Q2 2025, helped by higher-margin digital sales and exclusive brands.

Operational efficiency is directly tied to margin expansion in P&S.

• P&S Q2 2025 gross margin of 42.9% was primarily driven by the continued efficient utilization of manufacturing facilities.
• P&S Income from operations grew to $142 million in Q2 2025 from $130 million in Q2 2024.

Finance: review Q3 2025 P&S gross margin vs. 43.0% reported to confirm trend continuation by end of year.

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Customer Relationships

You're managing relationships across a vast, specialized ecosystem, from the pros installing your gear to the end-users buying it at retail. Resideo Technologies, Inc. structures its customer interactions to serve distinct segments, primarily through its ADI Global Distribution and Products & Solutions (P&S) segments.

Dedicated sales and technical support for professional contractors and dealers.

Resideo Technologies, Inc. maintains specific support structures tailored for its professional base across Security, HVAC, and Plumbing. This isn't just a general help line; it's dedicated access for those who install and service your products daily. For instance, the Security Professional Installer Support line operates Monday through Friday from 7:30 AM - 7:30 PM CT. For HVAC and Plumbing professionals, the dedicated support line is available Monday through Friday, 9:00 AM - 5:30 PM CT. This level of focused availability helps keep complex installations moving.

The company's P&S segment serves this professional channel, which relies on Resideo Technologies, Inc.'s trusted brands like Honeywell Home and First Alert. Resideo Technologies, Inc. has a strong network of over 100,000 pro installers globally, supporting over 15 million installations per year.

High-touch, relationship-driven model for ADI's 100,000+ integrator customers.

The ADI segment is explicitly relationship-driven, serving over 100,000 customers across 17 countries. This high-touch approach is critical for a wholesale distributor dealing in complex, low-voltage products spanning security, AV, and data communications. The relationship focus is clearly reflected in the segment's financial performance, where organic Exclusive Brands net revenue grew 32% year-over-year in Q2 2025. ADI's gross margin in Q2 2025 reached 22.2%, an expansion of 280 basis points year-over-year, showing that strong relationships translate to better mix and profitability.

Here's a look at the key metrics underpinning the ADI distribution relationship strategy as of late 2025:

Self-service and digital engagement via ADI's e-commerce platform.

The digital channel is a core growth strategy for ADI, providing self-service capabilities that are structurally accretive to margin. In Q2 2025, organic growth in the e-commerce channel was 19% compared to 6% growth in the prior year period. This digital momentum is significant; for the first quarter of 2025, organic e-commerce growth was 15% year-over-year. The platform supports ordering, inventory visibility, and access to a portfolio of over 500,000 products.

Retail channel support for DIY consumer purchases.

The P&S segment supports DIY consumer purchases through the retail channel, which reported record revenue growth in Q2 2025. This growth was specifically driven by strong point of sale volumes for products like the new Honeywell Home FocusPRO thermostats and First Alert SC5 connected smart smoke and CO detectors. Overall, Resideo Technologies, Inc.'s solutions and services are found in over 150 million residential and commercial spaces globally.

Support availability for the general consumer purchasing through retail channels is also extensive, with Homeowner Support lines often running until 8:00 PM CT on weekdays. For general Online Order Support and Customer Service, Resideo Technologies, Inc. offers 24-hour support, seven days a week.

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Channels

You're looking at how Resideo Technologies, Inc. gets its products and services into the hands of its customers as of late 2025. The Channels strategy is clearly split between the wholesale distribution arm, ADI Global, and the direct-to-professional/retail manufacturing arm, Products & Solutions (P&S).

ADI Global Distribution's physical branch network and digital e-commerce platform

The ADI Global Distribution segment operates a massive physical and digital footprint designed to serve professional low-voltage installers and resellers globally. This channel is critical, as evidenced by its $\mathbf{\$4.5}$ billion in net sales for the twelve months ended March 29, 2025, representing about $\mathbf{62\%}$ of the total company revenue at that time. The physical network is extensive, with reports indicating over $\mathbf{190}$ locations across North America, Puerto Rico, Europe, the Middle East, and Africa [cite: 2, search 2], or $\mathbf{200+}$ locations in $\mathbf{20+}$ Countries based on 2024 metrics [cite: 3, search 2]. Specifically, ADI has more than $\mathbf{100}$ branches in the U.S., Canada, Puerto Rico, and Mexico [cite: 1, search 2].

The digital component is growing rapidly, which is a key focus area for the business. For instance, in the second quarter of 2025, the organic growth in ADI's e-commerce channel hit $\mathbf{19\%}$ year-over-year, a significant acceleration from the prior year period's $\mathbf{6\%}$ growth.

Here's a snapshot of ADI's scale:

• Global Locations: 200+ [cite: 3, search 2]
• Countries Served: 20+ [cite: 3, search 2]
• Customers Served: Over 100,000 globally
• Products Available: Over 500,000 professionally installed products
• Q2 2025 Net Revenue: \$1,277 million
• Q3 2025 Net Revenue: \$1,203 million

Professional security and HVAC contractors and installers

The professional channel is the primary recipient of Products & Solutions (P&S) manufactured goods, such as Honeywell Home thermostats and First Alert safety devices, and is also the core customer base for ADI distribution services. Resideo Technologies, Inc. maintains a strong network of professional installers, numbering over $\mathbf{100,000}$. This network supports an estimated volume of more than $\mathbf{15}$ million installations annually across air, safety, security, water, and energy solutions. The P&S segment's Q3 2025 net revenue was $\mathbf{\$661}$ million, reflecting continued engagement with this professional base.

The P&S segment's channel performance in Q2 2025 showed that volume increased across the HVAC and Electrical Distribution channels, driven by demand for new product lines like the Honeywell Home FocusPRO thermostat [cite: 2, search 2].

Major retail partners for consumer-facing products

For consumer-facing products, the retail channel is a key outlet for the P&S segment. This channel experienced positive momentum, reporting record revenue growth in the second quarter of 2025, fueled by strong point of sale volumes for new products like the Honeywell Home FocusPRO thermostats and the First Alert SC5 connected smart smoke and carbon monoxide detectors. In the third quarter of 2025, the retail channel continued to report strong point of sale volumes.

The P&S segment's Q2 2025 net revenue was $\mathbf{\$666}$ million, up $\mathbf{6\%}$ year-over-year excluding currency impact, with the retail channel being a major contributor to this growth.

Original Equipment Manufacturers (OEMs) for component sales

While specific OEM revenue figures are often bundled within the broader Products & Solutions segment, the channel is implied through the manufacturing focus of the P&S business. The total company TTM revenue as of September 27, 2025, stood at $\mathbf{\$7.44}$ billion. The P&S segment, which includes component sales to OEMs, delivered net revenue of $\mathbf{\$661}$ million in Q3 2025. The P&S segment's gross margin in Q3 2025 was $\mathbf{43.0\%}$.

The following table summarizes the reported segment revenues for the third quarter of 2025, which reflects the combined output channeled through professional, retail, and OEM routes:

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Customer Segments

Resideo Technologies, Inc. serves distinct customer groups through its two primary reporting segments: ADI Global Distribution and Products & Solutions (P&S).

The revenue split for the last twelve months (LTM) ended September 27, 2025, shows the relative size of the customer bases served by each channel.

The total company net revenue for the third quarter ended September 27, 2025, was $1.86 billion.

Professional security, fire, and audio-visual systems integrators are primarily served through the ADI Global Distribution segment.

• ADI is a leading distributor in a $30B+ serviceable addressable industry segment.
• ADI serves over 100K+ pros annually via digital and physical storefronts.
• ADI operates over 200+ locations worldwide.

HVAC and plumbing contractors for residential and commercial controls are a core focus of the Products & Solutions segment.

• Resideo continues to serve more than 110,000 professionals through its distributor network.
• The P&S segment offers products like Honeywell Home thermostats, which help users save an average of 22% (heating users) and 17% (cooling users) on HVAC energy consumption when using recommended scheduling.

Residential homeowners and small businesses are the ultimate beneficiaries of the installed base and connected products.

• Resideo has a presence in over 150 million homes globally.
• A December 2024 survey indicated that 51% of U.S. homeowners were most likely to use DIY installation for a smart thermostat.

Retail consumers purchase DIY smart home and safety products directly or through home improvement retailers.

• The Honeywell Home X2S smart thermostat launched in Spring 2025 with a U.S. MSRP of $79.99.
• The same December 2024 survey showed 49% of U.S. homeowners would most likely use a professional to install a smart thermostat.

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Cost Structure

You're looking at the major outflows that define Resideo Technologies, Inc.'s cost base as of late 2025. It's a structure heavily influenced by a massive, one-time transaction that cleans up legacy obligations, so that's where we start.

One-time $1.59 billion cash payment to Honeywell for indemnification termination. Resideo Technologies, Inc. completed a definitive agreement to eliminate all future payment obligations under the 2018 Indemnification and Reimbursement Agreement with Honeywell International Inc. This involved a one-time cash payment of $1.59 billion made to Honeywell in August 2025, occurring in the third quarter. This payment was financed through approximately $400 million of cash-on-hand and new senior secured debt financing. Before this termination closing, Resideo made its regularly scheduled third quarter payment under the old agreement of $35 million on July 29, 2025. For context on the accounting impact, the second quarter of 2025 included a $882 million expense related to the announced agreement, which contributed to a reported net loss of $825 million for that quarter.

Selling, General, and Administrative (SG&A) expenses, including ADI's branch network costs. The costs associated with running the business, including the ADI Global Distribution branch network, are tracked alongside R&D. For the third quarter of 2025, Selling, General, and Administrative and Research and Development expenses combined totaled $192 million. This was an increase of $15 million compared to the prior period, primarily attributed to non-recurring costs from an ERP implementation. Looking back to the second quarter of 2025, the combined SG&A and R&D spend was $188 million, which was up $70 million year-over-year due to the inclusion of Snap One and planned growth investments.

Research and Development (R&D) investments for new product innovation. While R&D is bundled with SG&A in the combined reporting, the figures reflect ongoing investment. For instance, in the second quarter of 2025, R&D expenses increased by $11 million compared to the second quarter of 2024, driven by planned investments for future growth. The first quarter of 2025 saw SG&A and R&D expenses of $181 million, with a portion allocated to planned investments.

Cost of goods sold (COGS) for both manufactured and distributed products. Since COGS is not explicitly broken down by manufactured (Products & Solutions, P&S) versus distributed (ADI) in the provided combined expense data, we look at gross margins as a key indicator of product cost relative to revenue. The third quarter of 2025 saw a record high total company gross margin of 29.8% on net revenue of $1,864 million. The P&S segment, which represents the manufactured products, achieved a gross margin of 43.0% in the third quarter of 2025. This margin expansion was achieved at P&S for ten consecutive quarters.

Here's a quick look at the revenue and margin context for the latest reported quarter:

High material input costs defintely impacting profitability. While the company achieved strong margin expansion in Q3 2025, driven by price realization, cross-selling, and mix benefits, the underlying pressure from input costs is a constant factor in the cost structure. For example, in early 2025, margin improvement was noted as being partially offset by a more competitive pricing environment, which often signals cost pressures from materials or competition. Cost discipline remains a focus point, especially when managing the cost of goods sold across both the manufacturing and distribution arms.

Resideo Technologies, Inc. (REZI) - Canvas Business Model: Revenue Streams

Resideo Technologies, Inc. generates revenue primarily through two major segments: Products & Solutions (P&S) and ADI Global Distribution. The third quarter of 2025 showed continued growth in both areas, contributing to a total net revenue of $1.864 billion for the quarter ended September 27, 2025. The company has also provided an updated full-year 2025 net revenue outlook.

Here is a look at the segment revenue performance for Q3 2025, alongside the latest full-year guidance:

The composition of revenue within these segments is evolving, driven by strategic product focus and channel mix shifts. You can see the focus on higher-value offerings contributing to margin expansion.

• Products & Solutions (P&S) segment gross margin reached 43.0% in Q3 2025, marking its tenth consecutive quarter of year-over-year expansion.
• Sales of higher-margin Exclusive Brands and e-commerce transactions are key drivers within ADI Global Distribution.
• ADI Global Distribution's online business revenue grew 3% year-over-year in Q3 2025.
• Revenue growth in P&S was driven by customer demand for new products, including connected-home devices.
• The company is moving toward increased recurring revenue from connected services and software subscriptions following the integration of Snap One.