Why This Matters to Distributors: ADI Global Distribution reported record second-quarter sales as growth in security, professional audio-visual and data communications offset continued weakness in residential markets. The results are the distributor’s first since becoming an independent public company.
ADI Global Distribution reported record second-quarter sales of $1.286 billion as the specialty distributor began operating as an independent public company following its separation from Resideo Technologies.
Sales increased 0.7% from $1.277 billion a year earlier. Average daily sales increased 2%, reflecting one fewer selling day in the quarter. Net income was $6 million, compared with a net loss of $283 million a year earlier.
The year-earlier loss included a $331 million expense related to an indemnification agreement, making the net income comparison less representative of the underlying change in the business. Operating income fell 56.1% to $25 million from $57 million.
ADI completed its spin-off from Resideo on Aug. 3 and began trading on the New York Stock Exchange under the ticker ADIG on Aug. 4. ADI remained part of Resideo throughout the second quarter, which ended July 4, and the historical results were derived from Resideo’s accounting records.
The separation creates an independent publicly traded distributor with nearly $5 billion in expected annual sales. ADI carries more than 500,000 products from more than 1,000 suppliers and serves commercial and residential markets through its low-voltage distribution business. Its major categories include security, fire and life safety, professional and residential audio-visual products and data communications.
Security, professional audio-visual and data communications drove second-quarter sales growth. Residential audio-visual sales declined, which ADI attributed primarily to continued weakness in the U.S. housing market. Commercial security sales returned to mid-single-digit growth during the quarter.
Gross profit increased 3.2% to $292 million from $283 million. Gross margin increased to 22.7% from 22.2%, helped by about $20 million in tariff refunds. ADI said the refunds were partly offset by pricing and product mix and higher fuel costs for freight.
Higher expenses weighed on operating results. Operating expenses increased 18.1% to $267 million from $226 million. Selling, general and administrative expenses rose 8.4% to $206 million from $190 million. Transaction-related expenses increased to $18 million from $3 million as ADI prepared to separate from Resideo.
President and CEO Rob Aarnes said ADI is now focused on improving operations following the separation.
“As we begin our next chapter as an independent public company, we are operating from a position of strength and focused on converting our recent investments into greater operating efficiency,” Aarnes said.
For the first six months of 2026, sales increased 3.9% to $2.492 billion from $2.398 billion a year earlier. ADI reported net income of $5 million, compared with a net loss of $298 million in the first half of 2025.
ADI also issued its first full-year forecast as a standalone company. It expects 2026 sales of $4.95 billion to $5 billion, including $2.458 billion to $2.508 billion in the second half.
Following the spin-off, ADI has about $150 million in cash and access to a $500 million revolving credit facility. The distributor said it plans to use cash generated by the business to reduce debt while continuing to invest in internal growth and pursue smaller acquisitions.
The results provide the first financial benchmark for ADI as a standalone public distributor. While sales reached a quarterly record and several commercial categories improved, operating income declined as employee, facility and separation-related costs increased.
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