Allegion Reports Q1-2025 Financial Results

Solid execution drives strong margin expansion and operating leverage

Allegion plc, a leading global security products and solutions provider, reported financial results for its first quarter (ended March 31, 2025).

“Allegion is off to a strong start in 2025. I’m proud of our team’s execution as we remained agile in a very dynamic environment. I’m especially pleased with the results delivered by our Americas non-residential business, which demonstrate the resiliency of our business model, our broad end market exposure and the depth of our relationships with channel partners and end users,” said Allegion President and CEO John H. Stone.

“We were honored in the quarter with the Gallup Exceptional Workplace Award for the second consecutive year. We acquired two more bolt-on businesses in Q1 – Next Door Company and Lemaar – that expand our core and leverage our channel strengths. Our cash generation is strong, positioning Allegion well for additional capital deployment in 2025 that creates long-term value for our shareholders.”

Quarterly Financial Highlights

(All comparisons against the first quarter of 2024, unless otherwise noted)

• Net earnings per share (EPS) of $1.71, up 21.3% compared with $1.41; Adjusted EPS of $1.86, up 20.0% compared with $1.55
• Revenues of $941.9 million, up 5.4% on a reported basis and up 4.0% on an organic basis
• Operating margin of 20.9%, compared with 19.3%; Adjusted operating margin of 22.7%, up 150 basis points compared with 21.2%

Company Results

(All comparisons against the first quarter of 2024, unless otherwise noted)

Allegion reported first-quarter 2025 net revenues of $941.9 million and net earnings of $148.2 million, or $1.71 per share. Adjusted net earnings were $161.2 million, or $1.86 per share, up 20.0%, excluding items primarily related to restructuring, acquisition and integration expenses, as well as amortization expense related to acquired intangible assets.

First-quarter 2025 net revenues increased 5.4%. On an organic basis, which excludes impacts of acquisitions, divestitures and foreign currency movements, net revenues increased 4.0%, led by the Americas region. The organic revenue increase was driven by price realization and volume growth. Reported revenue reflects a 2.2% positive impact from acquisitions and a 0.8% headwind from foreign currency.

First-quarter 2025 operating income was $196.4 million, an increase of $24.3 million or 14.1%. Adjusted operating income in first-quarter 2025 was $213.4 million, an increase of $24.1 million or 12.7%.

First-quarter 2025 operating margin was 20.9%, compared with 19.3%. The adjusted operating margin in first-quarter 2025 was 22.7%, compared with 21.2%. The 150-basis-point increase in adjusted operating margin is attributable to favorable volume leverage, mix and acquisitions.

Segment Results

(All comparisons against the first quarter of 2024, unless otherwise noted)

The Americas segment revenues were up 6.8% (up 4.9% on an organic basis). The organic revenue increase was driven by price realization as well as volume growth. The non-residential business was up high-single digits, and the residential business declined mid-single digits. The reported revenue reflects a 2.3% positive impact from acquisitions and a 0.4% headwind from foreign currency. Adjusted operating margin in the region increased 130 basis points to 29.2%.

The International segment revenues decreased 0.3% (up 0.9% on an organic basis). The organic revenue increase was driven by price. Reported revenue reflects a positive impact from acquisitions of 1.8% and a 3.0% headwind from foreign currency. Adjusted operating margin in the region decreased 20 basis points to 10.2%.

Additional Items

(All comparisons against the first quarter of 2024, unless otherwise noted)

Interest expense for first-quarter 2025 was $24.7 million, an increase of $1.8 million.

Other income, net for first-quarter 2025 was $3.5 million, compared to other income, net of $3.7 million.

The company’s effective tax rate for first-quarter 2025 was 15.4% due to timing of discrete items, compared with 19.0%. The company’s adjusted effective tax rate for first-quarter 2025 was 16.1%, compared with 19.5%.

Cash Flow and Liquidity

Year-to-date available cash flow for 2025 was $83.4 million, an increase of $59.5 million versus the prior-year period. The company ended first-quarter 2025 with cash and cash equivalents of $494.5 million, as well as total debt of $1,997.0 million.

Share Repurchase and Dividends

In the first quarter of 2025, the company repurchased approximately 0.3 million shares for approximately $40 million and paid quarterly dividends of $0.51 per ordinary share or approximately $44 million.

2025 Full-Year Outlook

(All comparisons against full-year 2024, unless otherwise noted)

The company is affirming its previously disclosed 2025 full-year outlook, which assumes revenues increase 1% to 3% on a reported basis and increase 1.5% to 3.5% organically, after excluding the expected impacts of acquisitions, divestitures and foreign currency movements.

Given recent volatility in tariffs and foreign exchange rates, the company is not updating its revenue outlook for those assumptions. However, the company sees potential upside to its revenue outlook if current tariff-related pricing actions and foreign exchange rates persist.

The company estimates tariff costs of approximately $80 million in 2025. The company expects to offset tariffs at the operating profit and EPS level on a full-year basis, primarily through pricing actions. Accordingly, the company’s 2025 full-year EPS outlook includes the impact from tariffs enacted as of April 22, 2025.

Full-year 2025 reported EPS is expected to be in the range of $7.05 to $7.25, or $7.65 to $7.85 on an adjusted basis. The outlook assumes a full-year adjusted effective tax rate of approximately 17% to 18%.

Adjustments to 2025 EPS include estimated impacts of approximately $0.46 per share for acquisition-related amortization, as well as $0.14 per share for restructuring and M&A.

The outlook assumes an average diluted share count for the full year of approximately 86.7 million shares.

The company expects full-year available cash flow to be 85% to 90% of adjusted net income.

For full results click here.

About Allegion

Allegion (NYSE: ALLE) is a global pioneer in seamless access, with leading brands like CISA^®, Interflex^®, LCN^®, Schlage^®, SimonsVoss^® and Von Duprin^®. Focusing on security around the door and adjacent areas, Allegion secures people and assets with a range of solutions for homes, businesses, schools and institutions. Allegion had $3.7 billion in revenue in 2023, and its security products are sold around the world. For more, visit www.allegion.com.

Contact:

Whitney Moorman – Director, Global Communications – Whitney.Moorman@allegion.com – (317) 810-3241

Source: Allegion plc