ADIG shares fall 49.87% after $655 million loss and lower revenue outlook
Key Facts
ADIG shares fell 49.87% on November 12, 2026, as investors assessed third-quarter results from ADI Global Distribution and the company’s reduced revenue outlook. The company reported a net loss of $655 million, compared with net income of $26 million in the same quarter of 2025. The loss included a non-cash goodwill impairment of $659 million. The company had said it would release results before the market opened on November 12 and hold an investor call at 8:30 a.m. Eastern Time. The stock closed at $19.58 on November 11, before the results were announced.
ADI reported third-quarter revenue of about $1.31 billion, up 9% year over year. The company attributed the growth to two additional selling days and a 5% increase in average daily sales. The comparison also benefited from a weaker base in the year-earlier period, when disruptions from an enterprise resource planning system conversion in the Americas affected revenue. Sales of security, professional audio-visual, fire and life safety, and data communications products increased, but the gains were offset by lower residential audio-visual sales. The company said the decline in residential sales reflected continued weakness in the U.S. housing market.
Revenue growth did not translate into higher margins or operating profit. Gross margin fell to 20.9% from 22.6% a year earlier, and the company said it would have been 20.0% excluding tariff recoveries and the impact of stranded inventory adjustments. The company attributed the margin pressure to customer and product mix and inventory-related charges, as well as comparison with a tariff benefit in the prior year. Adjusted standalone earnings before interest, taxes, depreciation and amortization fell 13% to $66 million, from $76 million in the year-earlier period; its share of revenue declined to 5.1% from 6.3%. The chief executive said quarterly profitability came in below expectations, citing continued difficulty in the residential market, weak demand and product mix at the Exclusive Brands label.
The company said a higher share of commercial sales from national accounts and lower-margin projects also weighed on profitability. Continued weakness in the residential market, along with lower earnings and cash flow forecasts and declines in the share price and market capitalization, triggered a goodwill impairment assessment. The comparison with the second quarter showed a different margin trend: gross margin was 22.7%, versus 22.2% a year earlier, supported by tariff recoveries of nearly $20 million. Second-quarter revenue reached a record $1.286 billion, up 1% year over year, while average daily sales rose 2%. The chief executive said at the time that the quarter included record quarterly revenue, as the company had begun operating as an independent public company.
ADI cut its fourth-quarter revenue outlook to a range of $1.11 billion to $1.13 billion, putting the midpoint of $1.12 billion below analysts’ average estimate of $1.21 billion. It also lowered its 2026 revenue outlook to a range of $4.91 billion to $4.93 billion, compared with analysts’ estimate of $4.97 billion. The company said it expects total annual savings of about $60 million by the end of 2026 and is targeting $80 million on an adjusted run-rate basis by the end of 2027. Cash and cash equivalents stood at $208 million on October 3, alongside an undrawn $500 million revolving credit facility. The company completed its separation from Resideo on August 3, after operating within it during part of the third quarter.