Questions are being raised about how much growth Snap One and their Control 4 brand which is now under the control of new owners Resido Technologies actually delivered in the last quarter with Resido painting a rosy surge in their overall revenues due in part to the addition of Snap One sales, however analysts are questioning as to where are the net profits that should have followed from stronger revenues.
In the third quarter which had 90 days of trading that ended September 28, 2024. revenues increased 18% to $1.83 billion with gross profit also improving Resido claims.
When looked at organically, the results show a more moderate revenue growth of 4% for Snap One claims Strata Gee in the USA.
Resideo has two major business segments that include their Products and Services division which manufactures its own lines of products in the security market.
There is also ADI Global Distribution, a distributor of security and other low-voltage technology products, primarily in the commercial technology channel.
Snap One has been combined into the ADI business.
The company is still in the early stages of the ramp-up of its integration of the Snap One business into their operation, but the inclusion of Snap One’s numbers certainly has provided a boost to Resideo’s results.
“However, when looking at the results organically by taking Snap One’s contribution out of their numbers, we see a much more modest, but still positive, result” claims observers.
While the result was much better than Snap Ones last quarter when they reported a 1% drop in revenues and a 40% drop in net income in this quarter the new owners reported 3Q net revenues of US$1.83 billion, $280 million or 18% more than net revenues of US $1.55 billion in the same quarter last year.
When you compare the results on an apple for apples basis the $1.83 billion included $251 million from the newly acquired Snap One, which wasn’t in its numbers last year.
When you take that out of its numbers, organic growth was a more sedate $32 million increase or 4%.
One mystery to this whole report is the company’s net income claims industry web site Strata Gee.
Net income in the third quarter came in at $11 million, down $10 million or 48% compared to net income of $21 million in the same quarter last year.
The company has offered no explanation anywhere in their report for why or how that happened.
Eric Woodring of Morgan Stanley questioned why if net revenues are So strong, Why didn’t net profits Follow?
He claims that net income declined 48%.
