Loading...
01/11 03:10
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows strong financial performance with increased revenue, EPS, and cash flow. Margins remained stable despite increased expenses. The company has a positive outlook on nonresidential growth and expects improved margins due to tariff relief. Increased dividends and share repurchases also support a positive sentiment. The Q&A indicates confidence in overcoming tariff impacts and maintaining growth, with strong demand and acquisition contributions. Despite some international challenges, the overall sentiment is positive, predicting a stock price increase of 2% to 8%.
Revenue Revenue for the second quarter was over $1 billion, an increase of 5.8% compared to 2024. Organic revenue increased 3.2% in the quarter as a result of favorable price and volume led by our Americas nonresidential business, where demand remains strong.
Adjusted Operating Margin Q2 adjusted operating margin was 23.7%, flat to the prior year. Both segments had margin expansion, which was offset by increased corporate expenses, primarily for incentive compensation.
Adjusted Earnings Per Share (EPS) Adjusted earnings per share of $2.04 increased $0.08 or 4.1% versus the prior year. Operational performance and accretive capital deployment were more than offset by higher tax.
Available Cash Flow Year-to-date available cash flow was $275.4 million, which was up 56.5% as we continue to generate strong cash flow.
Americas Segment Revenue Revenue of $821.5 million was up 6.6% on a reported basis and up 4.5% on an organic basis. Organic growth included both favorable price and volume in the quarter. Reported revenue includes 2.1 points of growth from acquisitions.
International Segment Revenue Revenue of $200.5 million was up 2.9% on a reported basis and down 2.2% organically. Our electronic businesses continue to grow organically, but were more than offset by pressure in the mechanical portfolio.
Electronics Revenue Electronics revenue was up low double digits and continues to be a long-term growth driver for Allegion.
Residential Business Revenue Residential business declined mid-single digits in the quarter as markets remain soft in the current high interest rate environment.
SimonsVoss FORTLOX: SimonsVoss introduced FORTLOX, Allegion's first batteryless electronic cylinder, expanding applications and market segments.
Acquisitions: Allegion completed acquisitions of Trimco, Novas, ELATEC, Gatewise, and Waitwhile, enhancing its portfolio in mechanical, electronics, and software/service sectors.
Revenue milestone: Achieved first-ever quarterly revenue exceeding $1 billion, driven by strong nonresidential Americas growth and electronics.
Adjusted EPS outlook: Raised 2025 adjusted EPS outlook to $8-$8.15 due to strong operational execution and acquisitions.
Capital allocation strategy: Focused on balanced capital allocation, including investments in growth, dividends, and share repurchases.
Portfolio expansion: Strategic acquisitions in electronics and software/services to differentiate hardware and expand market reach.
Residential market softness: Residential markets have been soft in 2025 due to high interest rates, which could impact revenue growth in this segment.
Inflationary pressures: The company is taking pricing actions to offset inflationary pressures, which could affect margins and customer demand.
Tariff-related costs: The inclusion of approximately $40 million of tariff surcharge revenue in the outlook indicates ongoing challenges with tariffs, which could impact profitability.
Mechanical portfolio pressure: The international segment experienced a decline in the mechanical portfolio, offsetting growth in electronics, which could hinder overall segment performance.
High tax rate impact: The Q2 tax rate was negatively impacted by discrete items, which could affect net earnings.
Residential business decline: The residential business in the Americas declined mid-single digits due to soft market conditions, posing a risk to revenue in this segment.
Currency fluctuations: Currency was a tailwind in Q2, but fluctuations in foreign exchange rates could pose risks to financial performance.
Adjusted EPS Outlook: The company has raised its 2025 adjusted earnings per share (EPS) outlook to $8 to $8.15, citing strong operational execution, continued demand in nonresidential markets, accretive acquisitions, and updated foreign exchange rates.
Americas Organic Growth: The company has increased its organic growth outlook for the Americas to mid-single digits, driven by strength in the nonresidential business and the inclusion of surcharge revenue from tariffs.
Nonresidential Markets: The nonresidential markets, particularly institutional verticals, remain resilient, with strong aftermarket performance and steady growth in spec activity over 2024 and year-to-date 2025.
Residential Markets: Residential markets have been soft in 2025 due to high interest rates, with no significant recovery expected in the near term.
International Markets: The company expects roughly flat organic performance in international markets for 2025, with updates to the outlook for completed acquisitions and foreign currency changes.
Electronics Growth: Electronics revenue is expected to continue its double-digit growth trajectory, serving as a long-term growth driver for the company.
Acquisitions Impact: Recent acquisitions, including ELATEC, Gatewise, and Waitwhile, are expected to be accretive to 2026 adjusted EPS and increase the company's long-term growth potential at attractive margins.
Dividend Payment: Allegion continues to be a dividend-paying stock. In the second quarter, this amounted to $0.51 per share or approximately $44 million.
Share Repurchase: Share repurchases in the quarter amounted to approximately $40 million.
The earnings call highlights strong performance in non-residential markets, robust acquisition strategy, and positive adjustments to EPS outlook. The Q&A session reveals management's confidence in organic growth and margin expansion, despite challenges in residential markets. The raised EPS outlook and positive acquisition impacts suggest a favorable stock price movement, likely in the 2% to 8% range.
The earnings call shows strong financial performance with increased revenue, EPS, and cash flow. Margins remained stable despite increased expenses. The company has a positive outlook on nonresidential growth and expects improved margins due to tariff relief. Increased dividends and share repurchases also support a positive sentiment. The Q&A indicates confidence in overcoming tariff impacts and maintaining growth, with strong demand and acquisition contributions. Despite some international challenges, the overall sentiment is positive, predicting a stock price increase of 2% to 8%.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
