Allegion Releases Q1 2025 Earnings Report
Allegion plc, a global leader in security products and solutions, today announced its financial results for the first quarter of 2025, which ended on March 31. The company posted solid gains across key metrics, driven by robust performance in its Americas segment and strategic expansion through bolt-on acquisitions. Allegion also reaffirmed its full-year outlook, citing resilience across core markets and strong operational execution.
Leadership Comments Reflect Confidence in Strategy
“Allegion is off to a strong start in 2025,” said John H. Stone, President and CEO of Allegion. “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.”
Stone also highlighted recent milestones that underscore Allegion’s commitment to workplace excellence and long-term shareholder value. “We were honored in the quarter with the Gallup Exceptional Workplace Award for the second consecutive year,” he noted. “Additionally, we acquired two more bolt-on businesses – Next Door Company and Lemaar – that expand our core offerings and leverage our channel strengths. Our strong cash generation positions Allegion well for further capital deployment in 2025 to create long-term value.”
First-Quarter 2025 Financial Highlights
Allegion reported net revenues of $941.9 million in the first quarter, reflecting a year-over-year increase of 5.4%. On an organic basis, which excludes the effects of acquisitions, divestitures, and foreign currency translation, net revenues rose by 4.0%. This growth was fueled primarily by volume gains and strong price realization in the Americas region.
Net earnings for the quarter were $148.2 million, or $1.71 per diluted share, compared to $1.41 in the same period of 2024. On an adjusted basis – excluding restructuring, M&A, and amortization expenses – net earnings totaled $161.2 million, or $1.86 per share, marking a 20% increase year-over-year.
Operating income was $196.4 million, an increase of 14.1% from the first quarter of 2024. Adjusted operating income reached $213.4 million, up 12.7% year-over-year. The company also expanded its operating margins significantly. Reported operating margin improved to 20.9%, compared to 19.3% in Q1 2024. The adjusted operating margin climbed to 22.7%, from 21.2%, boosted by favorable volume leverage, business mix, and contributions from acquisitions.
Segment Performance
Americas
The Americas segment continued to be the company’s strongest performer. First-quarter revenues rose 6.8% year-over-year, including a 4.9% organic increase. This growth was attributed to both price realization and volume expansion, particularly within the non-residential business, which grew by high single digits. The residential business, however, saw a mid-single-digit decline. Revenue also reflected a 2.3% contribution from acquisitions and a modest 0.4% headwind from currency exchange.
Adjusted operating margin for the Americas was 29.2%, representing a 130-basis-point increase over the prior year, driven by operating leverage and product mix optimization.
International
The International segment reported a 0.3% decline in total revenue. However, on an organic basis, revenues improved by 0.9%, primarily due to pricing actions. Revenue also included a 1.8% benefit from acquisitions, offset by a 3.0% adverse impact from foreign currency fluctuations.
Despite the modest organic growth, adjusted operating margin for the International business decreased slightly by 20 basis points, landing at 10.2%, impacted by geographic and product mix and higher input costs in certain regions.
Additional Financial Details
Interest expense for the first quarter of 2025 was $24.7 million, up from $22.9 million a year earlier, due to higher debt levels and market interest rates. Other income, net totaled $3.5 million, slightly lower than the $3.7 million reported in Q1 2024.
The company’s effective tax rate dropped significantly to 15.4%, compared to 19.0% in the previous year, due to the timing of discrete tax items. On an adjusted basis, the effective tax rate was 16.1%, down from 19.5%, contributing positively to net income.
Strong Cash Flow and Liquidity Position
Year-to-date available cash flow was $83.4 million, a substantial increase of $59.5 million from the prior-year period, reflecting stronger earnings and efficient working capital management. Allegion closed the quarter with $494.5 million in cash and cash equivalents. Total debt stood at $1.997 billion, consistent with its capital allocation strategy to support both organic and inorganic growth.
Shareholder Returns
In line with its capital allocation priorities, Allegion returned value to shareholders through both dividends and share repurchases. In Q1 2025, the company repurchased approximately 0.3 million shares for around $40 million. It also paid quarterly dividends of $0.51 per share, amounting to approximately $44 million in total.
Strategic Acquisitions Strengthen Core Offerings
The acquisition of Next Door Company, a U.S.-based manufacturer of steel doors, and Lemaar, an Australian hardware brand, underscores Allegion’s commitment to strengthening its core business. These bolt-on acquisitions are expected to contribute modestly to revenue growth while expanding the company’s reach and reinforcing its supply chain and customer relationships in key regions.
2025 Full-Year Outlook Reaffirmed
Allegion has reaffirmed its full-year 2025 guidance, maintaining confidence in its ability to drive performance despite macroeconomic uncertainty and tariff-related volatility.
- Reported revenue growth is projected at 1% to 3%, while organic revenue growth is forecasted at 1.5% to 3.5%, excluding the effects of currency and M&A activity.
- The company estimates tariff-related costs of approximately $80 million in 2025, but it expects to fully offset those impacts at the operating profit and EPS levels through strategic pricing.
- Reported EPS is anticipated to range between $7.05 and $7.25, with adjusted EPS expected between $7.65 and $7.85.
- Adjustments to EPS guidance include approximately $0.46 per share for amortization of acquired intangibles and $0.14 per share for restructuring and M&A costs.
- The full-year adjusted effective tax rate is projected to be between 17% and 18%.
- Allegion expects full-year available cash flow to equal 85% to 90% of adjusted net income.
- The average diluted share count for the year is estimated at 86.7 million shares.
