ADI Global Posts Flat 4Q & 2023 Revenue as Margins Slip - Modern Distribution Management

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ADI Global Posts Flat 4Q & 2023 Revenue as Margins Slip

Meanwhile, gross margin at Resideo's manufacturing business unit saw solid improvement during 4Q23.
ADI Global Distribution

Resideo Technologies reported its 2023 fourth quarter and full-year financial results on Feb. 13, which included flat revenue and lower gross margin at its ADI Global Distribution unit — No. 7 on MDM’s 2023 Top Electrical/Data/Security Distributors List.

Resideo (Scottsdale, AZ) is a global manufacturer of technology products for home comfort, energy management and safety/security solutions and a distributor of low-voltage security, life safety, audio visual, data com and other products.

Fourth Quarter

The company posted 4Q23 total revenue of $1.54 billion, down from $1.52 billion a year earlier. Gross margin of 27.5% ticked down 10 bps YoY, while operating profit of $147 million jumped 50%. The company’s adjusted EBITDA of $136 million improved 11% YoY. Resideo had a 4Q23 net profit of $82 million, more than double that of $39 million a year earlier.

  • ADI Global Distribution 4Q23 revenue of $854 million dipped 1% YoY. Gross margin of 18.0% fell 110 bps, while adjusted EBITDA of $67 million fell 13%.
  • Product and Solutions 4Q23 revenue of $683 million dipped 1% YoY. Gross margin of 39.5% improved 110 bps, while adjusted EBITDA of $172 million increased 15%.

Full-Year 2023

For the full-year, Resideo posted total 2023 sales of $6.24 billion, down 2% from 2022. Gross margin of 27.2% fell 50 bps from 2022, while operating profit of $547 million fell 10%. The company had a 2023 net profit of $210 million, down from 2022’s $283 million.

  • ADI Global Distribution 2023 revenue of $3.57 billion was down 0.5% from 2022. Gross margin 18.7% fell 70 bps, while adjusted EBITDA of $307 million declined 9%.
  • Product and Solutions 2023 revenue of $2.67 billion fell 4% vs. 2022. Gross margin of 38.6% ticked down 10 bps, while adjusted EBItDA of $616 million fell 10%.
  • Resideo ended 2023 with $440 million of operating cash flow.

“We finished 2023 on a strong note with results exceeding the midpoint of our fourth quarter outlook driven by continued improvement in order activity and gross margin in our Products and Solutions business,” Resideo President and CEO Jay Geldmacher noted in the company’s 4Q earnings report. “During 2023 we executed on a number of strategic initiatives including selling our Genesis Cable business, ramping new product introductions, significantly enhancing ADI’s digital capabilities and reducing structural costs across the organization.”

2024 Outlook

Looking forward, Resideo said it forecasts 1Q24 revenue of between $1.46 billion-$1.51 billion, and full-year revenue of $6.08 billion to $6.28 billion.

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