Resideo Technologies, Inc.

Ladies and gentlemen, at this time, I would like to welcome everyone to the Resideo First Quarter 2024 earnings. Today's call is being recorded. All participants will be in a listen-only mode until the formal question and answers portion of the call. It is now my pleasure to turn today's call over to Mr. Jason Willey, Vice President of Investor Relations. Mr. Willey, you may now begin.

Good afternoon, everyone, and thank you for joining us for Resideo's first quarter 2024 earnings call. On today's call will be Jay Geltmacher, Resideo's Chief Executive Officer, and Tony Trento, our Chief Financial Officer. A copy of our earnings release and related presentation materials are available on the Investor Relations page of our website at investor.resideo.com. We would like to remind you that this afternoon's presentation contains forward-looking statements. Statements other than historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in residuals filings with the Securities and Exchange Commission. The company assumes no obligation to update any such forward-looking statements. We identify the principal risk and uncertainties that affect our performance in our annual report on Form 10-K and other SEC filings. With that, I will turn the call over to Jay.

Thank you, Jason, and thanks, everyone, for joining us today. I'm excited by the results the team delivered in the first quarter and the progress being made in transforming Resideo. For the quarter, we reported revenue at the midpoint and adjusted EBITDA at the higher end of our previously provided outlook. Our momentum within products and solutions continues to build, evidenced by a 180 basis point expansion in gross margin and 9% growth in segment-adjusted EBITDA year over year. We continue to make great progress on our strategic priorities across our portfolio, operations, and cost optimization initiatives. This is highlighted by our agreement to acquire SNAP1. which we expect will enhance our transformation efforts across Resideo. For our ADI business, SNAP-1 will expand product breadth and capabilities across audiovisual and smart living distribution, while expanding our ability to serve our core security customers. The combination better positions the business in attractive growth categories, adds new high-margin proprietary products and services, and broadens ADI's customer base. We see opportunity to expand SNAP-1's control floor and home automation offerings through tighter integration with products and solutions, extensive connected product offering specifically within safety and security. We also see opportunity to leverage our supply chain expertise and SNAP-1's proprietary product design and development capabilities to drive efficiencies in both organizations. For Resideo as a whole, We expect the acquisition will be accretive to gross margin and to adjusted EPS in 2025. We've identified meaningful cost synergies between the two businesses and a path to quickly lower our post-closing leverage levels. Needless to say, the team is quite excited about the future integration of SNAP-1 into Resideo, and we expect the acquisition to have meaningful positive impact on our long-term value creation. We are leaving no stone unturned to unlock long-term value within our portfolio. In addition to the SNAP-1 acquisition, we will continue to pursue opportunities to reposition the products and solutions portfolio toward higher margin, higher growth areas within our markets. We are also laser-focused on managing cost, and we continue to make progress on driving operational and expense efficiencies. These efforts helped us to expand products and solutions gross margins in the first quarter by 180 basis points, even as overall volumes declined slightly. We reduced overall residual operating expense by 13 million in the quarter, excluding restructuring. Combined with savings in our cost of goods, we were on track to hit the target we outlined last year for 125 million of gross cost savings for 2024. Looking at the businesses, we are ramping up new product introductions within products and solutions. Last week, we announced our latest first alert smoke alarms at retailers nationwide with advanced sensing technology that defines a new era of residential fire protection. At the ISC West show last month, we unveiled our first alert AI-enabled indoor camera, which will be available at ADI this summer. These introductions, coupled with our recently released video offerings and entire portfolio of professional offerings, provide a growing suite of whole home awareness safety, and security products. In addition to smart home innovation, we are also leading the charge alongside utility providers and smart appliance brands to help bring consumers a more comfortable and efficient home. Earlier in the week, we announced a partnership with Baltimore Gas and Electric to work together to help predict, identify, and proactively react to peak demand events and optimize energy use, all while maintaining customer comfort. Program participants can enroll their smart thermostats and receive financial incentives. This announcement builds upon the growing list of utility partners in our demand response offering. We see demand response as a continued source of growth for products and solutions and intend to meaningfully expand our presence in this market. We continue to expand our content in residential new construction, a market we expect to grow this year. are growing depth and breadth of home builder relationships and success driving BRK branded safety products into this channel are examples of the significant incremental value we've created through the first FLIRT acquisition. We are leveraging residual sales expertise and channel relationships with BRK's strong value proposition to meaningfully expand our position with customers. Products and solutions adjusted EBITDA margin grew by over 300 basis points year over year, driven by gross margin expansion and lower operating expense. We have accomplished this profit expansion against a backdrop of lower volumes while continuing to invest in key long-term strategic initiatives. Products and solutions margin improvement highlights the significant transformation work undertaken over the past four years. At ADI, We are increasing our digital capabilities and improving our customer experience. In the first quarter, e-commerce sales continued to grow, reaching 21% of sales. ADI's digital customers count also expanded in the quarter, demonstrating that our website and mobile app continue to be embedded into the integrator's purchasing process. ADI exclusive brand sales grew 7% year over year, achieving a quarterly record. We continue to expand our exclusive offerings and have added resources to enhance customer awareness of these offerings. The acquisition of SNAP-1 is an important part of our strategy to enhance the growth rate and gross margin for ADI and Resideo as a whole. Important drivers of both growth and margin opportunity are SNAP-1's portfolio of proprietary products, Control 4 platform, and customer support offerings. We see significant opportunity in bringing together Snap-1's broad capabilities with ADI's complimentary offerings and extensive customer reach. With that, I will turn the call over to Tony to discuss our first quarter results and 2024 outlook in more detail.