Allegion (ALLE) Q2 2025 earnings summary

Executive summary

• Achieved record quarterly revenue exceeding $1 billion, driven by high-single-digit growth in Americas non-residential business, robust electronic security product sales, and improved international margins.

• Raised full-year 2025 adjusted EPS outlook to $8.00–$8.15, reflecting robust operational execution, accretive acquisitions, and favorable FX.

• Completed multiple acquisitions, including Novas, ELATEC, GateWise, Waitwhile, Next Door, Lemaar, and Trimco, expanding technology and SaaS offerings and supporting long-term growth.

• Strong cash generation enabled $44 million in dividends and $40 million in share repurchases in Q2 2025.

• Paid $1.02 per share in dividends and repurchased 0.6 million shares for $80 million in H1 2025.

Financial highlights

• Q2 2025 revenue grew 5.8% year-over-year to $1,022.0 million; organic revenue up 3.2% led by Americas non-residential.

• Adjusted EPS rose 4.1% to $2.04; diluted EPS was $1.85, with operational gains offset by higher tax rate.

• Adjusted operating margin was 23.7%, flat year-over-year; Americas adjusted operating margin rose 50 bps to 29.9%.

• Year-to-date available cash flow reached $275.4 million, up 56.5% from prior year.

• Q2 2025 gross margin was 45.6%; adjusted EBITDA margin was 25.3%.

Outlook and guidance

• Full-year 2025 adjusted EPS outlook raised to $8.00–$8.15; GAAP EPS expected at $7.25–$7.40.

• Full-year revenue growth expected at 6.5%–7.5% reported and 3.5%–4.5% organic.

• Americas organic revenue outlook increased to mid-single digits, driven by non-residential strength and tariff surcharges; international organic performance expected to remain roughly flat.

• Tariffs expected to be EPS-neutral, with ~$40 million in surcharge revenue included in outlook.

• Available cash flow projected at 85%–90% of adjusted net income.