Resideo Shines in Q4 2024: Strong Revenue Growth, Gross Margin Expansion, and Record Free Cash Flow Generation
Resideo, a leading provider of smart home solutions, has reported a stellar performance in the fourth quarter of 2024. The company's strong revenue growth, gross margin expansion, and record free cash flow generation have set it up for continued success in the coming year.
In its latest conference call transcript, Resideo's CEO Jay Geldmacher highlighted the company's excellent execution and commitment to new product introduction as key drivers of its success. The company reported total net revenue of approximately $6.8 billion, a 8% year-over-year growth, with adjusted EBITDA growing 17% year-over-year to around $700 million.
The Products & Solutions business segment experienced growth in organic revenue and gross margins in 2024, with the year-over-year annual change in organic net revenue improving approximately 300 basis points versus 2023. This was due to realized price increases across substantially all product categories, offset by volume declines. Reported gross margins for 2021 expanded by 240 basis points year-over-year due to structural improvements that increased operational efficiency.
The company's commitment to new product introduction was evident in 2024 with the launch of the Focus Pro thermostat and VISTA security products in the last two quarters, which received very positive customer reception and demand. These products, along with a range of new ones scheduled to be introduced in 2025, have generated excitement within the company.
The ADI business segment also reported strong performance, with 2% organic net revenue growth year-over-year in 2024 after excluding the impact of currency and the acquisition of Snap One. The integration of Snap One into ADI continues to progress very nicely, with approximately $17 million of run rate synergies achieved in 2024, about 40% higher than expected.
Resideo's strong performance has set it up well for continued revenue growth, gross margin expansion, and durable free cash generation. However, the company acknowledges that the global macro environment remains mixed, with continued U.S. dollar strength and potential changes in the tariff environment adding uncertainty to 2025. Despite this, Resideo is prepared with comprehensive planning to address potential tariff changes, including commercial actions, price increases, and operational and supply chain moves.
In conclusion, Resideo's Q4 2024 performance has been nothing short of impressive, with strong revenue growth, gross margin expansion, and record free cash flow generation. As the company looks to continue its success in the coming year, it remains committed to innovation, execution, and adaptability in a rapidly changing global macro environment.
