Home automation and security solutions provider Resideo Technologies (NYSE: REZI) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 8% year on year to $1.91 billion. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $1.93 billion was less impressive, coming in 2.5% below expectations. Its non-GAAP profit of $0.65 per share was 7.4% above analysts’ consensus estimates.

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"Our first quarter results reflect the continued strong operational execution of both businesses in a dynamic macro-economic environment, resulting in results that exceeded the high end of our outlook range for all financial metrics," said Jay Geldmacher, Resideo's President and CEO.

Company Overview

Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Resideo’s 7.5% annualized revenue growth over the last five years was mediocre. This was below our standard for the industrials sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Resideo’s annualized revenue growth of 11% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, ADI Global Distribution and Products & Solutions, which are 63.1% and 36.9% of revenue. Over the last two years, Resideo’s ADI Global Distribution revenue (wholesale distribution of 450k+ products) averaged 18.4% year-on-year growth while its Products & Solutions revenue (branded offerings) averaged 4.3% growth.

This quarter, Resideo reported year-on-year revenue growth of 8%, and its $1.91 billion of revenue exceeded Wall Street’s estimates by 1.8%. Company management is currently guiding for flat sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Resideo has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.5%, higher than the broader industrials sector.

Looking at the trend in its profitability, Resideo’s operating margin decreased by 2.6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Resideo generated an operating margin profit margin of 5.3%, down 2.3 percentage points year on year. Since Resideo’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Resideo’s flat EPS over the last five years was below its 7.5% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

We can take a deeper look into Resideo’s earnings to better understand the drivers of its performance. As we mentioned earlier, Resideo’s operating margin declined by 2.6 percentage points over the last five years. Its share count also grew by 5%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Resideo, its two-year annual EPS growth of 26% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q1, Resideo reported adjusted EPS of $0.65, up from $0.63 in the same quarter last year. This print beat analysts’ estimates by 7.4%. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Resideo’s Q1 Results

We enjoyed seeing Resideo beat analysts’ EBITDA expectations this quarter. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. On the other hand, its adjusted operating income missed and its EBITDA guidance for next quarter fell short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The market seemed to be hoping for more, and the stock traded down 2.2% to $35.90 immediately after reporting.

Is Resideo an attractive investment opportunity at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).