ADI Global Distribution Inc. (“ADI”) (NYSE: ADIG), a leading global specialty distributor of low-voltage products, today announced financial results for its third quarter 2026 ended October 3, 2026 and updated its outlook for the remainder of 2026.

ADI operated as part of Resideo Technologies, Inc. (“Resideo”) for a portion of the third quarter of 2026 prior to the spin-off on August 3, 2026, and the historical financial information presented in this release prior to the spin-off was derived from Resideo’s accounting records and is presented on a carve-out accounting basis.

ADI third quarter 2026 net revenue was $1,306 million, up 8.6% year-over-year, reflecting average daily sales growth of 5% year-over-year and two additional selling days in the current quarter. Growth also benefited from an easier comparison with the prior-year quarter, when revenue was affected by disruptions associated with the Americas ERP conversion. Higher sales in security, professional audio-visual, fire and life safety and data communications were partially offset by lower residential audio-visual sales, primarily reflecting continued weakness in the U.S. housing market.

Gross margin was 20.9% in third quarter 2026, compared to 22.6% in third quarter 2025. The decline primarily relates to unfavorable customer and product mix and inventory-related charges, as well as the comparison with a temporary prior-year tariff benefit when selling-price increases took effect ahead of higher inventory costs. These pressures were partially offset by tariff refunds and a benefit from spin-off related inventory adjustments. Excluding these two items, gross margin was 20.0%.

Research and development expenses decreased $1 million due primarily to people and operating expense reductions. Selling, general and administrative expenses were up $12 million to $202 million primarily reflecting higher facility costs associated with real estate and distribution center consolidation, merit and cost inflation impacts, investments in third-party spend in the business, increases in finance, legal, human resources, information technology, and other standalone costs which were higher as compared to those allocated in the carve-out financials in the prior period.

During the third quarter of 2026, the Company recognized a non-cash goodwill impairment charge of $659 million following an interim quantitative impairment assessment that was triggered by continued weakness in the residential market, together with lower projected earnings and cash flows, declines in our stock price and market capitalization. The revised projections reflect continued residential market weakness affecting demand for Exclusive Brands products and unfavorable product and customer mix.

Including this charge, loss from operations was $634 million in third quarter 2026 compared to income from operations of $41 million in third quarter 2025.

Adjusted Standalone EBITDA decreased 13% to $66 million in third quarter 2026 compared to $76 million in third quarter 2025.

____________________

1 The Company defines Adjusted Standalone EBITDA as Adjusted EBITDA less estimated recurring and ongoing costs required to operate as a new independent public company.

Management Remarks

“Third-quarter profitability was below our expectations, primarily reflecting a continued challenging residential market and weaker-than-anticipated demand and product mix in our Exclusive Brands offering. A greater share of commercial sales from lower-margin national accounts and projects also weighed on profitability. These results fell short of our standards, and we are lowering our full-year outlook to reflect the third-quarter shortfall and further weakness in Exclusive Brands in the fourth quarter,” said Rob Aarnes, ADI’s President and CEO.

“With our transition to an independent public company complete, we are focused on strengthening execution and improving performance in a challenging operating environment. We expect to exit 2026 with approximately $60 million in annualized gross cost savings and remain on track to achieve our $80 million objective by the end of 2027 on a run rate basis. We are also developing additional cost reductions beyond that program to align our cost structure with current demand trends. In parallel, we are executing our One ADI transformation, integrating our systems and simplifying our operations to support long-term growth. These efforts, together with our leading market positions and differentiated omnichannel model, position ADI for long-term profitable growth and shareholder value creation.”

Balance Sheet and Capital Allocation

As of October 3, 2026, ADI’s liquidity consists of approximately $208 million of cash and cash equivalents and a $500 million fully undrawn revolving credit facility. ADI expects to generate consistent cash flow, benefiting from its capital-efficient business model.

Outlook

The Company is lowering its full-year 2026 outlook to reflect third-quarter performance and further weakness in Exclusive Brands in October. The revised outlook assumes these demand and mix pressures persist through the remainder of the year.

($ in millions)

Nine Months Ended (1)

Q4 2026

Full Year 2026

Net revenue

$3,798

$1,112 – 1,132

$4,910 – $4,930

Non-GAAP Adjusted Standalone EBITDA (Estimate)

$202

$28 – $38

$230 – $240

(1) Nine Months Ended 2026 represents results for the nine months ended October 3, 2026, as presented below.

Conference Call and Webcast Details

ADI will hold a conference call with investors on November 12, 2026, at 8:30 a.m. ET. The webcast can be accessed at https://investor.adiglobal.com, where the webcast link and related materials will be posted before the call. A replay of the webcast will be available following the presentation.

About ADI

ADI is a global specialty distributor of professionally installed low-voltage products serving commercial and residential markets through an omnichannel go-to-market platform. Within North America, ADI is a market-leading distributor in the professionally installed security, fire/life safety and residential audio-visual product categories. We offer over 500,000 products from more than 1,000 suppliers across key specialty low-voltage categories with strong proximity to our customers with a large network of store locations.

Forward-Looking Statements

This press release and the related conference call contain “forward-looking statements.” All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks and uncertainties that may cause the actual results or performance of ADI to differ materially from such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) our ability to achieve our outlook regarding the remainder of 2026, cash flow expectations and proposed use of cash, and goal to reduce leverage, (2) our ability to recognize the expected savings from, and the timing and impact of, our existing and anticipated cost reduction actions, and our ability to optimize our portfolio and operational footprint, (3) the amount of our obligations and the nature of our contractual restrictions pursuant to, and disputes that have or may hereafter arise under the agreements we entered into with Resideo in connection with the spin-off of ADI from Resideo, (4) the ability of ADI to drive increased customer value, profitability, cash generation, gross margin improvement, and financial returns and enhance strategic and operational capabilities, including the implementation of One ADI and dynamic pricing capabilities, (5) risks and uncertainties relating to tariffs that have been or may be imposed by the United States and other governments, (6) risks related to our completed separation from Resideo and that we may experience operational or other disruptions as a result of the separation, and (7) the other risks described under the headings “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” in our Registration Statement on Form 10, as amended, and other periodic filings we make from time to time with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance, and actual results, developments, and business decisions may differ from those envisaged by our forward-looking statements. Except as required by law, we undertake no obligation to update such statements to reflect events or circumstances arising after the date of this press release and we caution investors not to place undue reliance on any such forward-looking statements.

Non-GAAP Financial Measures

This press release includes certain “non-GAAP financial measures” as defined under the Securities Exchange Act of 1934. Management believes the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of ADI by presenting financial results between periods on a more comparable basis. Such non-GAAP financial measures should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. Readers should also consider the limitations associated with these non-GAAP financial measures, including the potential lack of comparability of these measures from one company to another.

The Company uses non-GAAP financial measures to supplement the financial measures prepared in accordance with U.S. GAAP. These include Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Standalone EBITDA (estimate) and Adjusted Standalone EBITDA margin (estimate).

Below are definitions and reconciliations of certain non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. Management believes these non-GAAP financial measures provide investors with a meaningful measure of its performance period to period, align the measures to how management evaluates performance internally, and make it easier for investors to compare our performance to peers. These measures should be considered in addition to, and not as replacements for, the most directly comparable U.S. GAAP measure.

The Company defines Adjusted EBITDA as net (loss) income excluding income taxes, depreciation and amortization, interest income and expense, stock-based compensation expense, Indemnification Agreement expense, restructuring expense, transaction related expenses, and other expense and certain other items that are otherwise of an unusual or non-recurring nature (including but not limited to impairment charges, litigation and insurance settlements, and gains and losses on disposal of assets). The Company defines Adjusted EBITDA Margin as Adjusted EBITDA divided by Net revenue.

The Company defines Adjusted Standalone EBITDA (estimate) as Adjusted EBITDA less estimated recurring and ongoing costs required to operate as a new independent public company. The Company defines Adjusted Standalone EBITDA Margin (estimate) as Adjusted Standalone EBITDA (estimate) divided by Net revenue.

We believe these measures are useful to investors as they provide greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as understanding ongoing operating trends.

A reconciliation of the forecasted range for Adjusted Standalone EBITDA (estimate) for the fourth quarter of 2026 and for the full year 2026 are not included in this release due to the number of variables in the projected range and because we are currently unable to quantify accurately without unreasonable efforts certain amounts that would be required to be included in the U.S. GAAP measure or the individual adjustments for such reconciliation. In addition, we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors.

ADI GLOBAL DISTRIBUTION INC.

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)
 

 

Three Months Ended

 

Nine Months Ended

(in millions, except per share amounts)

October 3,

2026

 

September 27,

2025

 

October 3,

2026

 

September 27,

2025

Net revenue

$

1,306

 

 

$

1,203

 

 

$

3,798

 

 

$

3,601

 

Cost of goods sold

 

1,033

 

 

 

931

 

 

 

2,977

 

 

 

2,804

 

Gross profit

 

273

 

 

 

272

 

 

 

821

 

 

 

797

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

202

 

 

 

190

 

 

 

607

 

 

 

561

 

Impairment of goodwill

 

659

 

 

 

–

 

 

 

659

 

 

 

–

 

Research and development expenses

 

10

 

 

 

11

 

 

 

33

 

 

 

28

 

Intangible asset amortization

 

24

 

 

 

24

 

 

 

73

 

 

 

70

 

Transaction related expenses

 

12

 

 

 

5

 

 

 

38

 

 

 

9

 

Restructuring expenses

 

–

 

 

 

1

 

 

 

7

 

 

 

6

 

Total operating expenses

 

907

 

 

 

231

 

 

 

1,417

 

 

 

674

 

(Loss) income from operations

 

(634

)

 

 

41

 

 

 

(596

)

 

 

123

 

Indemnification Agreement expense

 

–

 

 

 

–

 

 

 

–

 

 

 

364

 

Other expense (income), net

 

1

 

 

 

1

 

 

 

3

 

 

 

(1

)

Interest expense

 

19

 

 

 

17

 

 

 

52

 

 

 

29

 

Interest income

 

(1

)

 

 

(2

)

 

 

(4

)

 

 

(6

)

(Loss) income before taxes

 

(653

)

 

 

25

 

 

 

(647

)

 

 

(263

)

Provision for (benefit from) income taxes

 

2

 

 

 

(1

)

 

 

3

 

 

 

9

 

Net (loss) income

$

(655

)

 

$

26

 

 

$

(650

)

 

$

(272

)

 

 

 

 

 

 

 

 

(Loss) earnings per common share:

 

 

 

 

 

 

 

Basic

$

(8.65

)

 

$

0.34

 

 

$

(8.59

)

 

$

(3.58

)

Diluted

$

(8.65

)

 

$

0.34

 

 

$

(8.59

)

 

$

(3.58

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

76

 

 

 

76

 

 

 

76

 

 

 

76

 

Diluted

 

76

 

 

 

76

 

 

 

76

 

 

 

76

 

ADI GLOBAL DISTRIBUTION INC.

CONSOLIDATED AND COMBINED CONDENSED BALANCE SHEETS

(UNAUDITED)
 

(in millions, except share and per share amounts)

October 3, 2026

 

December 31, 2025

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

208

 

 

$

124

 

Accounts receivable, net

 

790

 

 

 

659

 

Inventories, net

 

1,064

 

 

 

1,036

 

Other current assets

 

189

 

 

 

154

 

Total current assets

 

2,251

 

 

 

1,973

 

Property, plant and equipment, net

 

112

 

 

 

107

 

Goodwill

 

400

 

 

 

1,066

 

Intangible assets, net

 

687

 

 

 

744

 

Operating lease right-of-use assets

 

245

 

 

 

236

 

Due from related parties – non-current

 

–

 

 

 

13

 

Other assets

 

11

 

 

 

13

 

Total assets

$

3,706

 

 

$

4,152

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

746

 

 

$

717

 

Accrued liabilities

 

178

 

 

 

175

 

Current portion of operating lease liabilities

 

41

 

 

 

37

 

Due to related parties – current

 

–

 

 

 

68

 

Total current liabilities

 

965

 

 

 

997

 

Long-term debt

 

980

 

 

 

1,185

 

Non-current portion of operating lease liabilities

 

218

 

 

 

209

 

Deferred tax liabilities

 

90

 

 

 

60

 

Other liabilities

 

16

 

 

 

17

 

Total liabilities

 

2,269

 

 

 

2,468

 

Equity:

 

 

 

Preferred stock, par value of $0.001 per share, 100 million shares authorized, 150 thousand shares issued and outstanding and $1,000 liquidation preference at October 3, 2026

 

150

 

 

 

–

 

Common stock, par value of $0.001 per share, 700 million shares authorized, 76 million shares issued and outstanding at October 3, 2026

 

–

 

 

 

–

 

Treasury stock, at cost

 

(1

)

 

 

–

 

Additional paid-in-capital

 

1,983

 

 

 

–

 

Net Former Parent investment

 

–

 

 

 

1,726

 

Accumulated deficit

 

(648

)

 

 

–

 

Accumulated other comprehensive loss, net

 

(47

)

 

 

(42

)

Total equity

 

1,437

 

 

 

1,684

 

Total liabilities and equity

$

3,706

 

 

$

4,152

 

ADI GLOBAL DISTRIBUTION INC.

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)
 

 

Nine Months Ended

(in millions)

October 3,

2026

 

September 27,

2025

Cash Flows From Operating Activities:

 

 

 

Net loss

$

(650

)

 

$

(272

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Impairment of goodwill

 

659

 

 

 

–

 

Depreciation and amortization

 

89

 

 

 

86

 

Restructuring expenses

 

7

 

 

 

6

 

Stock-based compensation expense

 

19

 

 

 

18

 

Operating lease right-of-use-asset amortization

 

29

 

 

 

27

 

Other, net

 

5

 

 

 

2

 

Changes in assets and liabilities:

 

 

 

Accounts receivable, net

 

(137

)

 

 

(93

)

Inventories, net

 

(35

)

 

 

(57

)

Other current assets

 

(35

)

 

 

(14

)

Accounts payable

 

34

 

 

 

(28

)

Accrued liabilities

 

7

 

 

 

4

 

Lease liabilities

 

(27

)

 

 

(25

)

Obligations payable under the Indemnification Agreement

 

–

 

 

 

(270

)

Other, net

 

23

 

 

 

–

 

Net cash used in operating activities

 

(12

)

 

 

(616

)

Cash Flows From Investing Activities:

 

 

 

Capital expenditures

 

(37

)

 

 

(37

)

Related party loan activity, net

 

13

 

 

 

(13

)

Other investing activities, net

 

2

 

 

 

–

 

Net cash used in investing activities

 

(22

)

 

 

(50

)

Cash Flows From Financing Activities:

 

 

 

Proceeds from issuance of long-term debt, net of issuance costs

 

988

 

 

 

–

 

Net transfers from Former Parent

 

98

 

 

 

621

 

Net decrease in due to related parties related to cash pooling arrangements

 

(65

)

 

 

(5

)

Cash distribution to Former Parent

 

(900

)

 

 

–

 

Other financing activities, net

 

(5

)

 

 

–

 

Net cash provided by financing activities

 

116

 

 

 

616

 

Effect of exchange rate changes on cash and cash equivalents

 

2

 

 

 

6

 

Net increase (decrease) in cash and cash equivalents

 

84

 

 

 

(44

)

Cash and cash equivalents at beginning of period

 

124

 

 

 

137

 

Cash and cash equivalents at end of period

$

208

 

 

$

93

 

NON-GAAP RECONCILIATIONS
 

ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, ADJUSTED STANDALONE EBITDA (ESTIMATE) AND

ADJUSTED STANDALONE EBITDA MARGIN (ESTIMATE)

(Unaudited)
 

 

Three Months Ended

 

Nine Months Ended

 

(in millions, except percentages)

October 3,

2026

 

September 27,

2025

 

October 3,

2026

 

September 27,

2025

Net (loss) income

$

(655

)

 

$

26

 

 

$

(650

)

 

$

(272

)

Provision for (benefit from) income taxes

 

2

 

 

 

(1

)

 

 

3

 

 

 

9

 

Impairment of goodwill

 

659

 

 

 

–

 

 

 

659

 

 

 

–

 

Depreciation and amortization

 

30

 

 

 

29

 

 

 

89

 

 

 

86

 

Interest expense

 

19

 

 

 

17

 

 

 

52

 

 

 

29

 

Interest income

 

(1

)

 

 

(2

)

 

 

(4

)

 

 

(6

)

Indemnification Agreement expense (1)

 

–

 

 

 

–

 

 

 

–

 

 

 

364

 

Stock-based compensation expense (2)

 

7

 

 

 

6

 

 

 

19

 

 

 

18

 

Restructuring expenses (3)

 

–

 

 

 

1

 

 

 

7

 

 

 

6

 

Transaction related expenses (4)

 

12

 

 

 

5

 

 

 

38

 

 

 

9

 

Spin-Off inventory basis adjustment (5)

 

(8

)

 

 

–

 

 

 

(8

)

 

 

–

 

Other (6)

 

1

 

 

 

1

 

 

 

3

 

 

 

(1

)

Adjusted EBITDA

$

66

 

 

$

82

 

 

$

208

 

 

$

242

 

Estimated incremental recurring expenses (7)

 

–

 

 

 

(6

)

 

 

(6

)

 

 

(18

)

Adjusted Standalone EBITDA (estimate)

$

66

 

 

$

76

 

 

$

202

 

 

$

224

 

 

 

 

 

 

 

 

 

Net revenue

$

1,306

 

 

$

1,203

 

 

$

3,798

 

 

$

3,601

 

Adjusted EBITDA Margin

 

5.1

%

 

 

6.8

%

 

 

5.5

%

 

 

6.7

%

Adjusted Standalone EBITDA Margin (estimate)

 

5.1

%

 

 

6.3

%

 

 

5.3

%

 

 

6.2

%

(1)

Represents the allocated portion of the expense related to the Honeywell Indemnification Agreement.

(2)

Represents non-cash compensation expenses recognized for stock-based compensation arrangements.

(3)

Consists of non-recurring charges associated with restructuring initiatives.

(4)

For the three and nine months ended October 3, 2026, represents $12 million and $38 million of transaction costs related to the Spin-Off. For the three months ended September 27, 2025, represents $3 million of Snap One integration costs and $2 million of transaction costs related to the Spin-Off. For the nine months ended September 27, 2025, represents $7 million of Snap One integration costs and $2 million of transaction costs related to the Spin-Off.

(5)

Represents the benefit to cost of goods sold associated with inventory held at the Spin-Off that was previously purchased from Resideo and reflected historical intercompany profit eliminations. The Company excludes this benefit from Adjusted EBITDA as the related inventory is sold.

(6)

Represents amounts included in Other expense (income), net reported on the Unaudited Consolidated and Combined Condensed Statement of Operations.

(7)

Represents estimated costs above allocated corporate expenses expected to be incurred within certain corporate functions, including finance, IT, legal and human resources. No adjustment was included for the three months ended October 3, 2026, as standalone costs for the period following the Separation were reflected in actual expenses.

 

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