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Resideo Announces Second Quarter 2024 Financial Results

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Second quarter net income of $30 million; Adjusted EBITDA of $175 million, above the high end of outlook range

Products and Solutions second quarter gross margin of 41.3%, fifth consecutive quarter of year-over-year improvement

Continued progress on business transformation with forthcoming new product introductions and completed acquisition of Snap One

Appoints new Chief Financial Officer, Mike Carlet, former Snap One CFO

SCOTTSDALE, Ariz., Aug. 8, 2024 /PRNewswire/ — Resideo Technologies, Inc. (NYSE: REZI), a leading global manufacturer and distributor of technology-driven products and solutions that provide home comfort and smart living, security, life safety and energy efficiency to consumers and businesses, today announced financial results for the second quarter ended June 29, 2024, which include 15 days of Snap One financial results following the close of the transaction on June 15, 2024.

Second Quarter 2024 Financial Highlights

Net revenue of $1.59 billion, down 1% compared to $1.60 billion in the second quarter 2023Net income of $30 million compared to $50 million in the second quarter 2023Adjusted EBITDA(1) of $175 million compared to $155 million in the second quarter 2023Fully diluted EPS of $0.19 and $0.34 and Adjusted EPS(1) of $0.62 and $0.48 for the second quarter 2024 and second quarter 2023, respectively.

Management Remarks

“Our second quarter results demonstrated the substantial progress we have made in transforming the structural profitability profile of the business and in executing on value creating strategic transactions,” commented Jay Geldmacher, Resideo’s President and CEO. “Products and Solutions delivered gross margin and Adjusted EBITDA margin at the highest levels since first quarter 2022. The business accomplished these results in a market environment constrained by higher interest rates and low housing turnover. ADI continued to make progress in driving key strategic initiatives around e-commerce and exclusive brands sales and saw improved customer activity as the quarter progressed.”

“I want to welcome former Snap One CFO, Mike Carlet, as CFO of Resideo effective tomorrow. Mike brings extensive finance and industry experience and will be a real asset across the organization. I also want to thank Tony Trunzo, who will stay on until March of 2025 to ensure a successful transition. Tony has been a tremendous partner to me and instrumental in Resideo’s transformation through his leadership in rebuilding our balance sheet, rationalizing our cost structure, and helping shape the strategic direction of the business.”

(1) This press release includes certain “non-GAAP financial measures” as defined under the Securities Exchange Act of 1934. Resideo management believes the use of such non-GAAP financial measure, specifically Adjusted EBITDA and Adjusted EPS, assists investors in understanding the ongoing operating performance of Resideo by presenting the financial results between periods on a more comparable basis.  See reconciliations of U.S. GAAP results to adjusted results in the accompanying tables.

Products and Solutions Second Quarter 2024 Highlights

Net revenue of $630 million, decreased 7% compared to the second quarter 2023Gross margin of 41.3%, up 300 basis points compared to the second quarter 2023Income from operations of $130 million compared to $115 million in the second quarter 2023Adjusted EBITDA of $156 million, 24.8% of revenue, compared to $137 million, 20.2% of revenue, in the second quarter 2023

Products and Solutions delivered net revenue of $630 million in the second quarter 2024, down 7% compared to second quarter 2023 and down 2% excluding the impact of the Genesis divestiture. First Alert safety products again delivered strong year-over-year sales growth, driven by continued expansion in the residential new construction channel. Air product revenue stabilized and orders improved compared to second quarter 2023, reflecting normalized channel inventories with key distributor customers and strength in new construction. Offsetting this growth was slower activity in the EMEA region, particularly in Energy products.

Gross margin for the quarter was 41.3%, compared to 38.3% in the second quarter 2023, reflecting improving material costs, lower direct labor spending and more favorable factory utilization. Selling, general and administrative expenses were down $8 million and research and development expenses remained down compared to 2023. Expense management was again strong in the quarter and helped drive operating profit for the quarter of $130 million or 20.6% of revenue, up from $115 million or 17% of revenue in second quarter 2023. Adjusted EBITDA grew 14% year-over-year in the second quarter 2024 to $156 million, with Adjusted EBITDA margin up 460 basis points to 24.8%.

ADI Global Distribution Second Quarter 2024 Highlights

Net revenue of $959 million, increased 4% compared to the second quarter 2023Gross margin of 19.4%, up 20 basis points compared to the second quarter 2023Income from operations of $62 million compared to $71 million in the second quarter 2023Adjusted EBITDA of $77 million, 8.1% of revenue, compared to $79 million, 8.6% of revenue, in the second quarter 2023Exclusive brand sales up 18% compared to prior year second quarter, not including Snap One

ADI second quarter 2024 net revenue of $959 million increased $34 million compared to second quarter 2023, driven by the inclusion of $45 million of Snap One revenue following the transaction close on June 15, 2024. ADI had growth in several categories including Fire, Intrusion, Datacom and Professional Audio Visual. This was offset by year-over-year declines in Video Surveillance and Residential Audio Visual. For ADI, not including Snap One, the e-commerce channel grew 6% in second quarter 2024 compared to the prior year period. Exclusive brand sales, not including Snap One, grew by 18% compared to the second quarter 2023, with record sales levels achieved for the quarter.

Gross margin for the quarter was 19.4%, up 20 basis points compared to second quarter of 2023. The increase was driven by the inclusion of higher margin Snap One sales, largely offset by reduced inflationary pricing benefits and lower product line margin. ADI has experienced a reduction of average cost inventory benefits year-over-year, as supplier price increases have reduced in pace and scale in 2024. Selling, general and administrative expenses were $118 million in 2024, up $16 million compared to prior period including $12 million of Snap One expenses. Operating profit of $62 million for second quarter 2024 decreased 13% from $71 million in second quarter 2023. Adjusted EBITDA declined to $77 million in second quarter 2024 from $79 million in second quarter 2023.

Cash Flow and Liquidity

Net cash provided by operating activities was $92 million in second quarter 2024 compared to $121 million in the second quarter 2023. The decrease was primarily driven by Snap One transaction costs. At June 29, 2024, Resideo had cash and cash equivalents of $413 million and total outstanding debt of $1.99 billion.

Outlook

The following table summarizes the Company’s current third quarter 2024 and full year 2024 outlook.

($ in millions, except per share data)

Q3 2024

2024

Net revenue

$1,790 – $1,830

$6,680 – $6,760

Non-GAAP Adjusted EBITDA

$170 – $180

$655 – $695

Non-GAAP Adjusted Earnings per share

$0.49 – $0.59

$2.15 – $2.35

Full Year Cash Provided by Operating Activities

 At least $375

Conference Call and Webcast Details

Resideo will hold a conference call with investors on August 8, 2024, at 5:00 p.m. ET. An audio webcast of the call will be accessible at https://investor.resideo.com, where related materials will be posted before the call. A replay of the webcast will be available following the presentation. To join the conference call, please dial 888-660-6357 (U.S. toll-free) or 1-929-201-6127 (international), with the conference title “Resideo Second Quarter 2024 Earnings” or the conference ID: 7301399.

About Resideo 

Resideo is a leading global manufacturer and developer of technology-driven products and components that provide critical comfort, energy management, and safety and security solutions to over 150 million homes globally. Through our ADI Global Distribution business, we are also a leading wholesale distributor of professionally installed electronic security and life safety products for commercial and residential markets and serve a variety of adjacent product categories including audio visual, data communications, and smart home solutions. For more information about Resideo, please visit www.resideo.com

Contacts:

Investors:

Media:

Jason Willey

Garrett Terry

Vice President, Investor Relations

Corporate Communications Manager

investorrelations@resideo.com 

garrett.terry@resideo.com 

Forward-Looking Statements

This release contains “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, which may cause the actual results or performance of the Company 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 third quarter 2024 and full year 2024, (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 nature of our contractual restrictions pursuant to, and disputes that have or may hereafter arise under the agreements we entered into with Honeywell in connection with our spin-off,  (4) risks related to our recently completed acquisitions including our ability to achieve the targeted amount of annual cost synergies and successfully integrate the acquired operations (including successfully driving category growth in connected offerings), (5) the ability of Snap One and/or Resideo to drive increased customer value and financial returns and enhance strategic and operational capabilities, (6) the ability of Snap One and/or Resideo to achieve the targeted amount of synergies and the related valuation implications described in this press release, (7) the accretive nature of the transaction to Resideo’s non-GAAP EPS in the first full year of ownership and the growth and margin profile of the combined businesses, (8) the ability to accelerate brand strategy as a result of the transaction, (9) the ability to integrate the Snap One business into Resideo and realize the anticipated strategic benefits of the transaction, including the anticipated operational and strategic benefits of the transaction, and (10) the other risks described under the headings “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2023 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.

Use of Non-GAAP Measures

This press release includes certain “non-GAAP financial measures” as defined under the Securities Exchange Act of 1934 and in accordance with Regulation G. Management believes the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting the 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.

We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with U.S. GAAP at the end of this release. A reconciliation of the forecasted range for Adjusted EBITDA and Adjusted Net Income per diluted common share for the third quarter of 2024 and for the fiscal period ending December 31, 2024 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 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.

Table 1: SUMMARY OF FINANCIAL RESULTS (UNAUDITED)

Q2 2024 (1)

YTD 2024 (1)

(in millions)

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

$      630

$       959

$        —

$   1,589

$   1,250

$    1,825

$       —

$   3,075

Cost of goods sold

370

773

(1)

1,142

745

1,483

2,228

Gross profit

260

186

1

447

505

342

847

Research and development expenses

21

21

46

46

Selling, general and administrative
     expenses

103

118

59

280

200

220

91

511

Intangible asset amortization

6

6

1

13

12

9

1

22

Restructuring, impairment and
     extinguishment costs, net

11

11

5

2

11

18

Income (loss) from operations

$      130

$         62

$      (70)

$      122

$      242

$        111

$   (103)

$      250

 

Q2 2023 (1)

YTD 2023 (1)

(in millions)

Products
and
Solutions

ADI Global
Distribution

Corporate

Total 
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

$      677

$       925

$        —

$   1,602

$   1,335

$    1,816

$        —

$   3,151

Cost of goods sold

418

747

1

1,166

826

1,467

2

2,295

Gross profit (loss)

259

178

(1)

436

509

349

(2)

856

Research and development expenses

28

1

29

55

1

56

Selling, general and administrative
     expenses

111

102

30

242

221

207

58

486

Intangible asset amortization

5

3

1

10

11

6

2

19

Restructuring and impairment
expenses

2

2

2

2

4

Income (loss) from operations

$      115

$         71

$      (33)

$      153

$      220

$       135

$      (64)

$      291

 

Q2 2024 % change compared with
prior period

YTD 2024 % change compared with
prior period

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

(7) %

4 %

N/A

(1) %

(6) %

— %

N/A

(2) %

Cost of goods sold

(11) %

3 %

N/A

(2) %

(10) %

1 %

N/A

(3) %

Gross profit

— %

4 %

N/A

3 %

(1) %

(2) %

N/A

(1) %

Research and development expenses

(25) %

N/A

N/A

(28) %

(16) %

N/A

N/A

(18) %

Selling, general and administrative
     expenses

(7) %

16 %

97 %

16 %

(10) %

6 %

57 %

5 %

Intangible asset amortization

20 %

100 %

— %

30 %

9 %

50 %

(50) %

16 %

Restructuring, impairment and
     extinguishment costs, net

N/A

N/A

N/A

450 %

150 %

— %

N/A

350 %

Income (loss) from operations

13 %

(13) %

112 %

(20) %

10 %

(18) %

61 %

(14) %

(1)

On January 1, 2024, certain corporate functions were decentralized into the operating segments aligning with the business strategy. Functional expenses related to information technology, finance, tax, business development, and research and development are now recorded within the Products and Solutions and ADI Global Distribution segments. For the three and six months ended July 1, 2023, $13 million and $25 million of corporate expenses have been reclassified into the Products and Solutions while $8 million and $16 million of corporate expenses have been reclassified into the ADI Global Distribution segments, respectively, decreasing reported Income from Operations to conform to the current year presentation.

Table 2: CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended

Six Months Ended

(in millions, except per share data)

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

Net revenue

$             1,589

$             1,602

$             3,075

$             3,151

Cost of goods sold

1,142

1,166

2,228

2,295

Gross profit

447

436

847

856

Operating expenses:

Research and development expenses

21

29

46

56

Selling, general and administrative expenses

280

242

511

486

Intangible asset amortization

13

10

22

19

Restructuring, impairment and extinguishment costs, net

11

2

18

4

  Total operating expenses

325

283

597

565

  Income from operations

122

153

250

291

Reimbursement Agreement expense (1)

47

44

90

85

Other expense (income), net

1

(2)

(3)

Interest expense, net

15

17

28

34

  Income before taxes

59

94

132

175

Provision for income taxes

29

44

59

68

  Net income

$                   30

$                   50

$                   73

$                107

Earnings per common share:

Basic

$               0.19

$               0.34

$               0.49

$               0.73

Diluted

$               0.19

$               0.34

$               0.48

$               0.72

Weighted average common shares outstanding:

Basic

146

147

146

147

Diluted

149

149

148

149

(1)

Represents the expense incurred pursuant to the Reimbursement Agreement, which has an annual cash payment cap of $140 million. The following table summarizes information concerning the Reimbursement Agreement:

Three Months Ended

Six Months Ended

(in millions)

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

Accrual for Reimbursement Agreement liabilities deemed
probable and reasonably estimable

$                   47

$                   44

$                   90

$                   85

Cash payments made to Honeywell

(35)

(35)

(70)

(70)

Accrual increase, non-cash component in period

$                   12

$                     9

$                   20

$                   15

Table 3: CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except par value)

June 29, 2024

December 31, 2023

ASSETS

Current assets:

Cash and cash equivalents

$                  413

$                          636

Accounts receivable, net

1,071

973

Inventories, net

1,188

941

Other current assets

212

193

Total current assets

2,884

2,743

Property, plant and equipment, net

424

390

Goodwill

3,079

2,705

Intangible assets, net

1,218

461

Other assets

379

346

Total assets

$              7,984

$                       6,645

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$                  980

$                          905

Current portion of long-term debt

12

12

Accrued liabilities

602

608

Total current liabilities

1,594

1,525

Long-term debt

1,979

1,396

Obligations payable under Indemnification Agreements

625

609

Other liabilities

492

366

Total liabilities

4,690

3,896

Stockholders’ equity

Preferred stock, $0.001 par value: 100 shares authorized, 0.5 shares issued and
outstanding at June 29, 2024 and no shares issued and outstanding at
December 31, 2023, respectively

482

Common stock, $0.001 par value: 700 shares authorized, 152 and 146 shares
issued and outstanding at June 29, 2024, respectively, and 151 and 145 shares
issued and outstanding at December 31, 2023, respectively

    Additional paid-in capital

2,276

2,226

    Retained earnings

881

810

    Accumulated other comprehensive loss, net

(242)

(194)

Treasury stock at cost

(103)

(93)

Total stockholders’ equity

3,294

2,749

Total liabilities and stockholders’ equity

$              7,984

$                       6,645

Table 4: CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

(in millions)

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

Cash Flows From Operating Activities:

Net income

$                   30

$                   50

$                   73

$                107

Adjustments to reconcile net income to net cash in
operating activities:

Depreciation and amortization

28

25

52

49

Stock-based compensation expense

15

13

29

25

Other, net

7

4

17

6

Changes in assets and liabilities, net of acquired
companies:

Accounts receivable, net

(91)

(58)

(57)

(35)

Inventories, net

(11)

12

(4)

(15)

Other current assets

6

11

9

3

Accounts payable

75

56

31

44

Accrued liabilities

11

(8)

(78)

(94)

Other liabilities

22

16

22

27

Net cash provided by operating activities

92

121

94

117

Cash Flows From Investing Activities:

Acquisitions, net of cash acquired

(1,334)

(1,334)

(6)

Capital expenditures

(15)

(29)

(36)

(49)

Other investing activities, net

7

6

Net cash used in investing activities

(1,342)

(29)

(1,364)

(55)

Cash Flows From Financing Activities:

Proceeds from issuance of incremental term loans
under the A&R Term B Facility, net

582

582

Proceeds from issuance of preferred stock, net of
issuance costs

482

482

Repayments of long-term debt

(3)

(3)

(6)

(6)

Other financing activities, net

(1)

(6)

(6)

(12)

Net cash provided by (used in) financing activities

1,060

(9)

1,052

(18)

Effect of foreign exchange rate changes on cash, cash
equivalents and restricted cash

4

(5)

10

Net (decrease) increase in cash, cash equivalents and
restricted cash

(190)

87

(223)

54

Cash, cash equivalents and restricted cash at beginning
of period

604

296

637

329

Cash, cash equivalents and restricted cash at end of
period

$                414

$                383

$                414

$                383

 

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND

NET INCOME COMPARISON

(Unaudited)
 

RESIDEO TECHNOLOGIES, INC.

Three Months Ended

Six Months Ended

(in millions, except per share data)

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

GAAP Net income

$                   30

$                   50

$                   73

$                107

Less: preferred stock dividends

2

2

GAAP Net income available to common stockholders

28

50

71

107

Acquisition and integration costs

34

34

Stock-based compensation expense

15

13

29

25

Intangible asset amortization

13

10

22

19

Reimbursement Agreement accrual increase, non-cash
component (1)

12

9

20

15

Other (2)

12

(3)

17

(5)

Tax effect of applicable non-GAAP adjustments (3)

(22)

(7)

(31)

(14)

Non-GAAP Adjusted net income available to common
stockholders

$                   92

$                   72

$                162

$                147

Three Months Ended

Six Months Ended

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

GAAP Net income per diluted common share

$               0.19

$               0.34

$               0.48

$               0.72

Acquisition and integration costs

0.23

0.23

Stock-based compensation expense

0.10

0.09

0.20

0.17

Intangible asset amortization

0.09

0.06

0.15

0.13

Reimbursement Agreement accrual increase, non-cash
component (1)

0.08

0.06

0.14

0.10

Other (2)

0.08

(0.02)

0.11

(0.03)

Tax effect of applicable non-GAAP adjustments (3)

(0.15)

(0.05)

(0.22)

(0.10)

Non-GAAP Adjusted net income per diluted common
share

$               0.62

$               0.48

$               1.09

$               0.99

(1)

Refer to the Unaudited Consolidated Statements of Operations herein.

(2)

Other includes restructuring expenses, impairment charges, extinguishment costs, loss on sale of assets, Tax Matters Agreement gain, foreign exchange transaction loss (income), and litigation settlements.

(3)

We calculated the tax effect of non-GAAP adjustments by applying a flat statutory tax rate of 25% for the three months ended June 29, 2024 and July 1, 2023.

 

 NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Unaudited)
 

RESIDEO TECHNOLOGIES, INC.

Three Months Ended

Six Months Ended

(in millions)

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

Net revenue

$         1,589

$         1,602

$         3,075

$         3,151

GAAP Net income

$               30

$               50

$               73

$             107

GAAP Net income as a % of net revenue

1.9 %

3.1 %

2.4 %

3.4 %

Provision for income taxes

29

44

59

68

GAAP Income before taxes

59

94

132

175

Acquisition and integration costs

34

34

Depreciation and amortization

28

25

52

49

Stock-based compensation expense

15

13

29

25

Interest expense, net

15

17

28

34

Reimbursement Agreement accrual increase, non-cash
component (1)

12

9

20

15

Other (2)

12

(3)

17

(5)

Non-GAAP Adjusted EBITDA

$             175

$             155

$             312

$             293

Non-GAAP Adjusted EBITDA as a % of net revenue

11.0 %

9.7 %

10.1 %

9.3 %

(1) 

Refer to the Unaudited Consolidated Statements of Operations herein.

(2) 

Other includes restructuring expenses, impairment charges, extinguishment costs, loss on sale of assets, Tax Matters Agreement gain, foreign exchange transaction loss (income), and litigation settlements.

 

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Unaudited)
 

PRODUCTS AND SOLUTIONS SEGMENT

Three Months Ended

Six Months Ended

(in millions)

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

Net revenue

$             630

$             677

$         1,250

$         1,335

GAAP Income from operations

$             130

$             115

$             242

$             220

GAAP Income from operations as a % of net revenue

20.6 %

17.0 %

19.4 %

16.5 %

Stock-based compensation expense

4

5

10

9

Other (1)

4

9

2

Non-GAAP Adjusted Income from Operations

$             138

$             120

$             261

$             231

Depreciation and amortization

18

17

35

34

Non-GAAP Adjusted EBITDA

$             156

$             137

$             296

$             265

Non-GAAP Adjusted EBITDA as a % of net revenue

24.8 %

20.2 %

23.7 %

19.9 %

(1)  Other includes restructuring expenses and litigation settlements.

 

ADI GLOBAL DISTRIBUTION SEGMENT

Three Months Ended

Six Months Ended

(in millions)

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

Net revenue

$             959

$             925

$         1,825

$         1,816

GAAP Income from operations

$               62

$               71

$             111

$             135

GAAP Income from operations as a % of net revenue

6.5 %

7.7 %

6.1 %

7.4 %

Stock-based compensation expense

3

1

5

3

Acquisition and integration costs

4

4

Other (1)

2

2

2

Non-GAAP Adjusted Income from Operations

$               69

$               74

$             122

$             140

Depreciation and amortization

8

5

13

9

Non-GAAP Adjusted EBITDA

$               77

$               79

$             135

$             149

Non-GAAP Adjusted EBITDA as a % of net revenue

8.0 %

8.5 %

7.4 %

8.2 %

(1)  Other includes restructuring expenses.

 

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SOURCE Resideo Technologies, Inc.

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BTQ Technologies’ QSSN Selected as Core Security Infrastructure for South Korea’s First Bank-Led KRW Stablecoin Proof-of-Concept

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BTQ provides strategic advisory support and QSSN as core PQC security infrastructure for the iM Bank initiative on the Kaia mainnet, advancing post-quantum migration across global financial infrastructure

BTQ has been selected as the core post-quantum cryptography security technology provider for South Korea’s first bank-led KRW stablecoin proof-of-concept, delivering its Quantum Secure Stablecoin Settlement Network (“QSSN”) for the initiative.
 BTQ is providing strategic advisory support and helping coordinate implementation across the partnership with iM Bank and Finger, supporting the integration of post-quantum protections into regulated digital money infrastructure.
 Built on the Kaia mainnet, the proof-of-concept is connected to the blockchain ecosystems originally developed by Kakao and LINE, linking the initiative to two of the largest messaging and digital platform ecosystems in Korea and Japan.

VANCOUVER, BC, May 6, 2026 /PRNewswire/ – BTQ Technologies Corp. (“BTQ” or the “Company”) (Nasdaq: BTQ) (CBOE CA: BTQ), a global quantum technology company focused on securing mission-critical networks, today announced that it it has been selected as the core PQC security technology provider through its Quantum Secure Stablecoin Settlement Network (“QSSN”) in a proof-of-concept with its Korean strategic partner, Finger Inc. (“Finger”), and iM Bank, a leading Korean commercial bank, for South Korea’s first bank-led Korean won stablecoin infrastructure incorporating post-quantum cryptography (“PQC”).

The proof-of-concept represents more than a technical pilot. It marks an important step in bringing next-generation quantum security into banking infrastructure within Korea’s regulated financial system. In addition to providing QSSN as the core PQC security framework, BTQ is contributing consulting and strategic coordination across the three-way partnership, helping align the project’s security architecture, implementation approach, and long-term post-quantum migration objectives.

“Post-quantum migration requires more than a cryptographic upgrade. It requires coordination across infrastructure, implementation, and institutional stakeholders,” said Olivier Roussy Newton, Chief Executive Officer of BTQ Technologies. “In this initiative, BTQ is providing both strategic advisory support and QSSN as the post-quantum security architecture, while helping lead coordination across the three-way partnership. We believe this proof-of-concept demonstrates how financial institutions can begin integrating quantum-resilient protections into digital money systems in a practical and operationally viable way.”

South Korea’s First Bank-Led PQC Stablecoin Infrastructure Initiative

BTQ is working alongside iM Bank and Finger on a three-way initiative to validate the issuance and distribution infrastructure for a Korean won stablecoin. In addition to supplying QSSN as the PQC security layer, BTQ is providing consulting support and helping to guide coordination across the partnership as the parties evaluate how to integrate post-quantum protections into bank-led digital asset infrastructure.

The proof-of-concept will validate several key components, including real-time reconciliation between bank reserves and blockchain-issued supply, a global-standard smart contract architecture, connectivity to global infrastructure for overseas distribution, and the integration of a PQC-based dual-signature security structure. By applying BTQ’s PQC signature architecture alongside the existing ECDSA cryptographic framework, the system is designed to preserve operational continuity for financial institutions while proactively addressing future quantum computing threats.

Built on Kaia Mainnet

A notable feature of the proof-of-concept is that it will be implemented on the Kaia mainnet, one of Korea’s leading Layer 1 blockchain networks. Kaia was created through the merger of Klaytn, the blockchain originally developed by Kakao, and Finschia, the blockchain associated with LINE. Kakao and LINE sit at the center of two of the largest messaging and digital platform ecosystems in Korea and Japan, respectively, making Kaia a significant piece of regional digital infrastructure.

Klaytn previously participated in the Bank of Korea’s CBDC pilot ecosystem, and the Bank of Korea has continued to advance CBDC testing through initiatives such as Project Hangang.

By combining BTQ’s PQC technology with blockchain infrastructure tied to the Kakao and LINE ecosystems, the proof-of-concept is intended to establish a model that aligns institutional-grade security, blockchain scalability, and evolving regulatory requirements for digital money infrastructure.

QSSN as the Security Layer

The PQC security foundation for the initiative is BTQ’s Quantum Secure Stablecoin Settlement Network, or QSSN, a quantum-secure network architecture designed for stablecoin, tokenized deposit, payment, and digital asset infrastructure. QSSN is designed to protect critical issuer functions, including stablecoin issuance, burning, transfer authority, upgrade control, and administrative permissions, by integrating PQC-based signatures while maintaining existing user experience and operational workflows.

BTQ has previously announced that QSSN was highlighted in the U.S. Post-Quantum Financial Infrastructure Framework (“PQFIF”) as a model architecture for post-quantum digital money infrastructure. The Company has also positioned QSSN as a standards-oriented initiative advanced through QuINSA and aligned with emerging post-quantum financial infrastructure requirements.

Addressing the Harvest-Now, Decrypt-Later Risk

The timing of the proof-of-concept reflects the growing urgency surrounding the “Harvest-Now, Decrypt-Later” risk, in which attackers may collect encrypted financial data today and decrypt it later once sufficiently advanced quantum capabilities emerge. Global institutions are already accelerating post-quantum migration. The U.S. National Institute of Standards and Technology (“NIST”) has finalized its first set of post-quantum cryptography standards, including ML-DSA, ML-KEM, and SLH-DSA, while major technology companies and financial institutions continue to define their own post-quantum transition timelines.

BTQ’s QSSN addresses this challenge through a dual-signature design that allows existing ECDSA-based infrastructure to operate in parallel with NIST-aligned PQC signatures such as ML-DSA. This approach enables banks and payment infrastructure providers to begin a phased transition toward quantum-safe security without disrupting existing systems.

Expanding BTQ’s Korean Ecosystem

BTQ continues to expand its Korean ecosystem across digital assets, payments, banking infrastructure, and hardware-based security. In October 2025, BTQ announced that Finger had joined Danal as an early participant in BTQ’s QSSN pilot program, with the initiative expected to progress from proof-of-concept toward commercialization under QuINSA-aligned guidelines and broader industry frameworks such as PQFIF.

The commencement of the iM Bank proof-of-concept represents an important commercial signal for BTQ, indicating that demand for post-quantum migration among Korean financial institutions is beginning to move from policy discussion toward infrastructure-level implementation. As Korea advances both quantum technology policy and stablecoin-related regulatory discussions, BTQ believes QSSN is well positioned at the intersection of regulated finance, digital asset infrastructure, and post-quantum security.

About iM Bank
iM Bank is a South Korean commercial bank and a subsidiary of DGB Financial Group. Headquartered in Daegu, iM Bank presents itself as a financial companion for customers and traces its roots to Daegu Bank, which was established in 1967 as Korea’s first regional bank. For more information, please visit https://www.imbank.co.kr/

About Finger Inc. Group
Finger supplies and develops financial IT solutions to provide optimized money management strategies for employees and corporate customers. Providing “Smartphone Financial Services”, “Corporate Cash Management Services” for businesses, “Private Wealth Management Services” for private consumers.

Since the year 2000, Finger has accumulated a number of awards and patents regarding its businesses. Based on its Mobile Enterprise Application Platform(MEAP) Orchestra and its funds management system using screen-scrapping technologies, Finger was the first company in Korea to deliver a smartphone banking banking-service. For more information, please visit http://www.finger.co.kr/

About BTQ
BTQ Technologies Corp. (Nasdaq: BTQ | Cboe CA: BTQ) is a quantum technology company focused on accelerating the transition from classical networks to the quantum internet. Backed by a broad patent portfolio and deep technical expertise, BTQ is advancing a full-stack, neutral-atom quantum computing platform spanning hardware, middleware, and post-quantum security solutions for finance, telecommunications, logistics, life sciences, and defense.

Connect with BTQ: Website | LinkedIn | X/Twitter

ON BEHALF OF THE BOARD OF DIRECTORS
Olivier Roussy Newton
CEO, Chairman
Neither Cboe Canada nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Information

Certain statements herein contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to the business plans of the Company, including with respect to its research partnerships, and anticipated markets in which the Company may be listing its common shares. Forward-looking statements or information often can be identified by the use of words such as “anticipate”, “intend”, “expect”, “plan” or “may” and the variations of these words are intended to identify forward-looking statements and information.

The Company has made numerous assumptions including among other things, assumptions about general business and economic conditions, the development of post-quantum algorithms and quantum vulnerabilities, and the quantum computing industry generally. The foregoing list of assumptions is not exhaustive.

Although management of the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information herein will prove to be accurate. Forward-looking statements and information are based on assumptions and involve known and unknown risks which may cause actual results to be materially different from any future results, expressed or implied, by such forward-looking statements or information. These factors include risks relating to: the availability of financing for the Company; business and economic conditions in the post-quantum and encryption computing industries generally; the speculative nature of the Company’s research and development programs; the supply and demand for labour and technological post-quantum and encryption technology; unanticipated events related to regulatory and licensing matters and environmental matters; changes in general economic conditions or conditions in the financial markets; changes in laws (including regulations respecting blockchains); risks related to the direct and indirect impact of COVID-19 including, but not limited to, its impact on general economic conditions, the ability to obtain financing as required, and causing potential delays to research and development activities; and other risk factors as detailed from time to time. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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SOURCE BTQ Technologies Corp.

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Zimmer Biomet to Present at the BofA Securities 2026 Health Care Conference

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WARSAW, Ind., May 6, 2026 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH), a global medical technology leader, today announced that members of the Zimmer Biomet management team will participate in the Bank of America Securities Health Care Conference on Wednesday, May 13, 2026, with a fireside chat at 8:40 a.m. PT (11:40 a.m. ET).

A live audio webcast can be accessed via Zimmer Biomet’s Investor Relations website at https://investor.zimmerbiomet.com. It will be available for replay following the fireside chat.

About Zimmer Biomet 
Zimmer Biomet is a global medical technology leader with a comprehensive portfolio designed to maximize mobility and improve health. We seamlessly transform the patient experience through our innovative products and suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence.

With 90+ years of trusted leadership and proven expertise, Zimmer Biomet is positioned to deliver the highest quality solutions to patients and providers. Our legacy continues to come to life today through our progressive culture of evolution and innovation. 

For more information about our product portfolio, our operations in 25+ countries and sales in 100+ countries or about joining our team, visit www.zimmerbiomet.com or follow on LinkedIn at www.linkedin.com/company/zimmerbiomet or X at www.x.com/zimmerbiomet.

Contacts:

 

Media

Investors

Troy Kirkpatrick

David DeMartino

614-284-1926

646-531-6115

troy.kirkpatrick@zimmerbiomet.com

david.demartino@zimmerbiomet.com

Kirsten Fallon

Zach Weiner

781-779-5561

908-591-6955

kirsten.fallon@zimmerbiomet.com

zach.weiner@zimmerbiomet.com

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SOURCE Zimmer Biomet Holdings, Inc.

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NextLadder Ventures Announces Co-Founder Leadership Team, Investment Focus Areas For Over $1 Billion Initiative Empowering Americans with Personalized, Tech-Enabled Support Tools

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New senior hires from Google and The Collaborative Fund to lead product strategy and venture investing

Fund unveils first investment focus areas to catalyze new ‘Navigation Technology’ market, equipping Americans with cutting-edge tools to achieve economic security, opportunity and empowerment

ST. LOUIS, May 6, 2026 /PRNewswire/ — NextLadder Ventures, a new fund backed by more than $1 billion in capital, today announced its priority investment areas for building a new market for “Navigation Technology” (NavTech) — tools that provide Americans with personalized solutions to navigate life’s challenges and achieve greater economic mobility — and announced its co-founding team, including two new senior hires.

The fund’s active focus areas are based on extensive research identifying the key experiences and high-stakes decision points that have an outsized impact on American families’ economic mobility. Launched investment areas include financial health, career navigation, and benefits and social services access, with further exploration underway around housing, legal aid, justice and re-entry, and mental and physical health. 

The organization is also today welcoming two senior leaders: Lauren Loktev is joining NextLadder as Managing Director of Investments and Brigitte Hoyer Gosselink as Managing Director of Product. Loktev was most recently a partner at the Collaborative Fund, where she backed several breakout companies in early child development, education, and sustainability. Gosselink comes to NextLadder from Google, where she led the company’s AI and social impact portfolio. They join a growing team which has deep expertise at the intersection of economic mobility, technology, public policy, and philanthropy.

NextLadder’s Focus Areas for Investment

Today, the fund is kicking off a plan to deploy $1 billion over the next seven years to accelerate the design, development, and deployment of accessible NavTech tools that aim to help families more successfully navigate the major life experiences that determine whether they get ahead or fall behind. As NextLadder’s inaugural frontier AI lab partner, Anthropic is supporting the build-out of the organization’s AI-native capabilities and is offering technical assistance to NextLadder’s portfolio organizations. 

As an increasing proportion of Americans across income levels find themselves overextended and overwhelmed, NavTech tools are designed to help individuals and families understand their options, connect to information and resources, and take action to recover from a setback or take advantage of an opportunity and reclaim their economic futures.

“Life is getting harder, and too many Americans are stuck facing some of the most complex and consequential moments of their lives without much support,” said Ryan Rippel, CEO of NextLadder Ventures. “Every day, millions in this country face fork-in-the-road decisions that have major implications on whether they climb up the economic ladder or fall farther behind. AI has understandably intensified many Americans’ anxieties about their jobs and their security in the economy. But these technologies are now also making it possible to deliver highly personalized, affordable tools to meet the needs of tens of millions of Americans in a way that has never been practically achievable or financially viable before. With NavTech tools, built for the reality of families’ everyday experiences, we can empower Americans to overcome setbacks, navigate life’s toughest financial decisions, and build more secure futures.”

NavTech tools, built with the needs of individuals, families, and trusted community partners at the center of their design, have the potential to ease burdens most acutely faced by 90 million Americans who live in households that have difficulty in paying for usual home expenses, and turbocharge the capacity of the 1.6 million community workers in non-profit or local, state, and federal government roles who serve them. This growing category of digital technologies includes tools that help families access opportunities such as personalized financial advice and legal aid, get connected with available resources and programs, and manage unexpected hurdles like losing a job or facing an eviction – while freeing social workers and service providers to spend more time on people and less time on red tape and paperwork.

The fund’s active investment areas include:

Financial Health: Developing highly personalized, AI-powered financial health tools that can provide tailored, sustained counsel to help users build savings and protect and recover from financial shocks;
Career Navigation: Building tools to support career navigation, manage and support career transitions, and help workers, case managers, and employers identify pathways to living wage work — all designed to help people successfully find the right jobs for them.
Benefits & Social Services Access: Helping eligible Americans seamlessly identify and enroll in all the benefits and social services available to them, particularly those that support career navigation and transitions, help them navigate critical life moments, and achieve stability toward economic opportunity.

NextLadder is exploring additional focus areas, including housing, legal aid, justice and re-entry, caregiving, and mental and physical health. More on the organization’s vision of these focus areas is available HERE.

In addition to backing direct NavTech solutions, NextLadder is investing in the developers, partners, and standards required to build a durable, self-sustaining market. Across all focus areas, the fund is prioritizing efforts to ensure NavTech tools are reliable, protect users’ privacy, and are trusted by the families who depend on them.

NextLadder’s Co-Founder Leadership Team

NextLadder’s five co-founders will be CEO Ryan Rippel, Chief Strategy and Operations Officer Rhett Dornbach-Bender, Chief of Staff Callie Schwartz, and the two new senior hires: Managing Director of Investments Lauren Loktev and Managing Director of Product Brigitte Hoyer Gosselink, rounding out the fund’s expertise in investing, technology, and impact.

“We’re thrilled to welcome Lauren and Brigitte to the NextLadder team,” said Rippel. “Brigitte has spent her career proving that when applied purposefully, AI and technology can deliver meaningful benefits for communities, and she’ll set the bar for what NavTech tools can deliver for American families today and in the years to come. And with her deep experience backing mission-driven founders, Lauren is the perfect leader to build our venture practice from the ground up and accelerate the growth of the NavTech field. With this team in place, we’re positioned to make NavTech tools easier to build, fund, and access so they reach the people who need them most.”

Loktev brings 15 years of venture capital experience investing at the intersection of for-profit and for-good. Most recently at Collaborative Fund, she backed several companies to significant scale and launched Collab+Sesame, a first-of-its-kind thematic seed fund in partnership with Sesame Workshop focused on early childhood education. At NextLadder, she will build and lead the fund’s venture practice, sourcing and scaling investments in the founders building the next generation of NavTech tools.

“We have a once in a generation opportunity to help steer AI solutions toward those who need them most,” said Loktev. “Many amazing, accomplished founders see this too, and they are on a mission to build scalable, transformative businesses in the critical verticals that help people navigate life-changing moments. I couldn’t be more excited to join NextLadder and to support the most inspiring leaders building this market from the ground up. Thanks to our unique, long-term mandate, we can be creative and flexible in investing across stage and check size to partner with the entrepreneurs and leaders we believe will change the world.”

Prior to her role at NextLadder, Gosselink spent over a decade at Google in several roles including Director of AI and Social Impact, directing more than $500 million in funding for organizations applying AI to address challenges including crisis response, education, and economic opportunity. At NextLadder, she will lead AI and product strategy across the fund’s portfolio, backing solutions and setting market-wide standards for how NavTech tools are designed, evaluated, and improved over time.

“If we collectively harness the AI transformation strategically and purposefully, we can transform the way Americans are empowered to access greater economic mobility,” said Gosselink. “We believe that people-centered products, combined with shifts in the market and the services available to families, can fundamentally reshape how millions of Americans navigate critical moments and achieve prosperity on their own terms.”

To request interviews from the NextLadder Ventures leadership team, contact media@nextladder.com.

About NextLadder Ventures

NextLadder Ventures is a time-bound venture with one goal: empower millions of Americans to reach their potential by 2040. Backed by over $1 billion in capital, the organization invests in breakthrough technologies that remove barriers to economic success and put people in control of their futures. NextLadder Ventures is trailblazing a new market for tech-enabled Navigation Technology tools that help people access the resources they need to navigate pivotal moments — offering flexible, risk-tolerant capital to entrepreneurs building these transformative tools today, while creating a pipeline of tech, talent, and capital for the long run.

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SOURCE NextLadder Ventures

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