Allegion (ALLE) Q2 2026 earnings summary

Executive summary

• Achieved 12.7% year-over-year revenue growth in Q2 2026, driven by strong organic growth, pricing, and acquisitions, with robust margin expansion in the Americas.

• Adjusted EPS grew 17.6% to $2.40, and net earnings reached $184.6M, reflecting high-teens EPS growth year-over-year.

• Raised full-year 2026 outlook for reported revenue growth to 7.5%-8.5% and adjusted EPS to $8.85-$9.00, citing continued strength in Americas non-residential business.

• International segment improved sequentially after ERP challenges but faced weaker demand, especially in Germany.

• Strong demand for electronic security products and electronics, especially in higher education and data centers, continues to drive long-term growth.

Financial highlights

• Q2 2026 revenues reached $1,151.5 million, up 12.7% year-over-year; organic revenue up 6.9%.

• Adjusted operating margin was 24.2%, up 50 basis points; operating margin improved to 22.1%.

• Adjusted EPS was $2.40, up 17.6%; diluted EPS was $2.15.

• Year-to-date available cash flow was $260.8 million, down 5.3% due to higher receivables.

• Net earnings for Q2 2026 were $184.6 million; operating income was $254.7 million, up 15.9%.

Outlook and guidance

• Full-year 2026 reported revenue growth outlook raised to 7.5%-8.5%; organic growth outlook to 3.5%-4.5%.

• Adjusted EPS guidance increased to $8.85-$9.00; reported EPS expected at $7.95-$8.10.

• Available cash flow expected at 85%-95% of adjusted net income; tax rate projected at 18%-19%.

• Americas organic growth expected at higher end of mid-single digits; international outlook reduced to low single-digit organic decline.

• Management anticipates sufficient liquidity and no covenant compliance challenges for at least the next 12 months.