Resideo Technologies (REZI) risk factors, FY2025 10-K

Other

1. 01You should carefully consider all of the information in this Form 10-K and each of the risks described below, which we believe are the material risks that we face

Risks Relating to Our Business

1. 02We operate in highly competitive markets that are rapidly changing
2. 03exclusive supply relationships, our ability to attract and retain customers could be adversely affected, which could adversely affect our business, financial condition, results of operations and cash flows
3. 04considerations that have not historically affected our business in markets with more established intellectual property protection systems
4. 05We rely on certain suppliers of products, materials, and components and are otherwise subject to raw material supply variability with our suppliers which may impact our ability to meet commitments to customers and cause us to incur significant liabilities
5. 06We may from time to time pursue acquisitions. Our business may be adversely affected if we cannot consummate acquisitions on satisfactory terms, or if we cannot effectively integrate acquired companies or assets35% rewritten
6. 07Uncertainty in the development, deployment, and use of artificial intelligence (“AI”) in our products and services, as well as our business more broadly, could adversely affect our business and reputation
7. 08Weakness in the economy, market trends and other conditions affecting the profitability and financial stability of our customers, our supply chain and our logistics network could negatively impact our sales growth, costs and results of operationsNew
8. 09Failure to achieve and maintain a high level of product and service quality could damage our reputation with customers and negatively impact our results
9. 10We may not be able to retain or expand relationships with certain significant customers
10. 11Failure to increase productivity through sustainable operational improvements, as well as an inability to successfully execute transformation programs or to effectively manage our workforce, may reduce our profitability or adversely impact our businesses
11. 12We are subject to the economic, political, regulatory, foreign exchange, and other risks of international operations73% rewritten
12. 13Maquiladora program and other local regulations, which have become stricter in recent years. In addition, if the Mexican government adopts additional adverse changes to the program, including nationalization, our manufacturing costs in Mexico would increaseNew
13. 14We rely on a dependable information technology (“IT”) infrastructure and network operations that have adequate cybersecurity functionality21% rewritten
14. 15Enhanced tariff, import/export restrictions, or other trade barriers may continue to impact global economic conditions82% rewritten
15. 16Regulations and societal actions to respond to global climate change could negatively affect our business22% rewritten
16. 17Our business is subject to the risks of earthquakes, hurricanes, tornadoes, fires, power outages, floods, pandemics, epidemics, natural disasters, and other catastrophic events or other public health emergencies
17. 18The proposed ADI Spin-Off is subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated timeline, or at all, and will involve significant time and expense, which could disrupt or adversely affect our businessNew
18. 19The ADI Spin-Off may not achieve the anticipated benefits and may expose us to additional risksNew
19. 20A spin-off of ADI Global Distribution business could adversely affect our earnings and cash flowsNew

Risks Relating to Legal and Regulatory Matters

1. 21Failure to comply with the broad range of standards, laws, and regulations in the jurisdictions in which we operate may result in exposure to substantial disruptions, costs, and liabilities21% rewritten
2. 22publicity regarding our privacy practices could injure our reputation, harm our ability to keep existing customers or attract new customers, or otherwise adversely affect our business, assets, revenue, brands, and reputationNew
3. 23We cannot predict with certainty the outcome of litigation matters, government proceedings, and other contingencies and uncertainties
4. 24We have incurred, and may continue to incur, significant costs in connection with some or all of these matters

Risks related to the Honeywell Spin-Off, our agreements and our relationships with Honeywell

1. 25Resideo Technologies, IncNew
2. 26We may not be able to resolve any potential conflicts, and, even if we do so, the resolution may be less favorable to us than if we were dealing with a party other than our former parent company63% rewritten
3. 27The terms of our debt documents may impose restrictions on our business and our operations require substantial capital and we may not be able to obtain additional capital that we need in the future on favorable terms or at all

Risks Relating to Our Common Stock and the Securities Market

1. 28Our stock price has been volatile; stockholder’s percentage ownership in our Company may be diluted in the future
2. 29The preferred stock issued in connection with the Snap One transaction has rights, preferences, and privileges that are not held by, and are preferential to, the rights of our common stock and has reduced the relative voting power of the holders of our common stock
3. 30Certain provisions in our governing documents may discourage takeovers
4. 31We depend on the recruitment and retention of qualified personnel, and our failure to attract and retain such personnel could adversely affect our business, financial condition, results of operations, and cash flows28% rewritten
5. 32Our effective tax rate will be affected by factors including changes in tax rules, and in the interpretation and application of those rules, in the countries in which we operate64% rewritten
6. 33Currency exchange rate fluctuations and financial counterparty risks may adversely affect our results22% rewritten
7. 34If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired and investors’ views of us could be harmed
8. 35If our goodwill, other intangible assets and long-lived assets become impaired, we may be required to record a significant charge to earnings
9. 36We may be required to make significant cash contributions to our defined benefit pension plans