Resideo Technologies Inc. delivered strong first-quarter 2025 results, driven by a standout performance from its ADI Global Distribution business, which posted 29% year-over-year reported revenue growth and continued to expand gross margins despite macroeconomic pressures and rising tariffs on China-sourced goods.
In the first quarter of 2025, Resideo reported total net revenue of $1.77 billion, up 19.1% from $1.49 billion in the same period last year. The company’s adjusted net income rose to approximately $93 million, compared to $69 million a year ago, representing 34.8% year-over-year growth.
Within that total, the ADI Global Distribution segment reported $1.02 billion in revenue, a 29% increase from approximately $790 million in the first quarter of 2024. On an organic basis—excluding the impact of the Snap One acquisition and currency fluctuations—ADI delivered 4% year-over-year revenue growth, with 7% growth in average daily sales.
ADI’s reported growth was bolstered by the Snap One acquisition, but even on an organic basis, revenue grew 4% year-over-year, with 7% growth in average daily sales. The business saw strong demand in commercial product categories, including professional audio/video, networking, and security systems, which offset softness in the residential AV segment. Gross margin for ADI rose 360 basis points to 21.6%, driven by category mix, exclusive brand performance, and disciplined pricing strategies.
“Organic growth was led by strength across commercial product categories, continued contributions from large accounts, and growth in our digital channel,” said Rob Aarnes, president of ADI. “Despite two fewer selling days and widespread store closures early in the quarter due to weather, customer demand remained healthy and resilient.”
Aarnes added that ADI’s exclusive brands business posted 26% year-over-year revenue growth and contributed meaningfully to margin expansion. “Exclusive brands are a strategic priority,” he said. “Not only are they growing faster than the rest of the portfolio, but they also deliver higher gross profit dollars.”
100 new products launched under exclusive brands during the quarter, and ADI was recognized for innovations across its Episode, Triad, Luma, and Arachnid product lines.
The integration of Snap One is also progressing faster than planned, with cross-selling momentum and operational synergies ahead of Year 2 targets. “We’ve streamlined distribution center operations and consolidated store networks while keeping service levels high,” Aarnes said. “The team is executing exceptionally well.”
ADI is more exposed to China-origin goods than Resideo’s manufacturing operations, and executives acknowledged that third-party product suppliers haven’t yet fully passed on cost increases from new tariffs. The company estimates the maximum potential tariff impact could affect up to 25% of ADI’s cost of goods sold before mitigation, but it has implemented pricing actions to offset the pressure.
“We’ve taken a phased pricing approach with customers and negotiated commercial actions with suppliers,” Aarnes said. “Our intent is to fully mitigate the impact and protect gross profit dollars.”
CFO Michael Carlet added that tariffs on ADI’s exclusive brands—where Resideo controls sourcing—have already been factored into financial guidance. “We’ve only included price impacts from third-party vendors where we’ve received formal notice,” he said. “We haven’t assumed any volume loss due to higher prices, though that remains a risk.”
Despite the tariff concerns, analysts were upbeat on ADI’s position. “This looks a lot like a classic inflationary environment where well-run distributors like ADI can use pricing power to improve margins,” said Ian Zaffino of Oppenheimer during the call.
Resideo executives said there was minimal evidence of customers pulling forward purchases ahead of price rises. “We saw little buy-ahead behavior and continued strong demand into April and early May,” Aarnes said, noting that commercial categories remain a bright spot. “We’re seeing record backlogs, growing project pipelines, and rising engagement in categories like data communications and security.”
CEO Jay Geldmacher added, “Across both segments, our customer engagement remains solid. Demand is healthy, and we are not seeing significant cancellations or hesitancy despite the broader macro uncertainty.”
For the second quarter of 2025, Resideo expects revenue between $1.805 billion and $1.855 billion and adjusted EBITDA between $175 million and $195 million. Full-year guidance remains unchanged, reflecting cautious optimism amid ongoing tariff volatility and housing market softness.
Evercore ISI analysts like the company’s ability to balance growth and margin expansion. “ADI is becoming a structurally stronger business,” analysts wrote in a post-call note. “E-commerce, exclusive brands, and Snap One synergies are driving sustainable profitability improvements.”
Resideo emphasized that its long-term margin expansion story remains intact. “We’re seeing ongoing structural gains in both businesses,” CFO Carlet said. “This isn’t just a single quarter story—we’re building durable, margin-accretive growth engines.”
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