Results
Allegion (NYSE: ALLE) Reports Q2-2026 Financial Results
Low-Double Digit Revenue Growth, High-Teens EPS Growth;
Outlook
Raising Full-Year 2026 OutlookGuidance raised
Results
Quarterly Financial HighlightsGuidance raised
6Net earnings per share (EPS) of $2.15, up 16.2% compared with $1.85; Adjusted EPS of $2.40, up 17.6% compared with $2.04
Revenues of $1,151.5 million, up 12.7% on a reported basis and up 6.9% on an organic basis
Operating margin of 22.1%, compared with 21.5%; Adjusted operating margin of 24.2%, compared with 23.7%
Management commentary
“Allegion delivered a strong quarter driven by organic growth and margin expansion in the Americas,” Allegion President and CEO John H. Stone said.
1“As a result, we are raising our company’s full-year outlook for revenue and adjusted EPS.”Guidance raised
“Entering the second half of 2026, we see continued strength in our Americas non-residential business and positive momentum in demand indicators there.
With demand weaker in some European markets, our Allegion International team is focused on execution and cost discipline.”
Results
Q2 2026 Company Results
Allegion reported second-quarter 2026 net revenues of $1,151.5 million and net earnings of $184.6 million, or $2.15 per share.
Adjusted net earnings were $206.0 million, or $2.40 per share, up 17.6%.
(Details of the adjustments are included in the footnotes of the tables in this press release.)
4Second-quarter 2026 net revenues increased 12.7%.
On an organic basis, which excludes impacts of acquisitions, divestitures and foreign currency movements, net revenues increased 6.9%, led by the Americas region.
The organic revenue increase was driven by volume growth and price realization.
Reported revenue reflects a 5.1% net positive impact from acquisitions and divestitures, as well as a 0.7% tailwind from foreign currency.
Second-quarter 2026 operating income was $254.7 million, an increase of $35.0 million or 15.9%.
Adjusted operating income in second-quarter 2026 was $278.8 million, an increase of $36.9 million or 15.3%.
Second-quarter 2026 operating margin was 22.1%, compared with 21.5%.
The adjusted operating margin in second-quarter 2026 was 24.2%, compared with 23.7%.
The adjusted operating margin increase is attributable to favorable volume leverage as well as price and productivity net of inflation and investment (PPII), inclusive of transactional foreign currency, which was positive on a dollar basis and a tailwind to margin rate.
Q2 2026 Segment Results
The Americas segment revenues were up 11.8% (up 8.9% on an organic basis).
7The non-residential and residential businesses were both up high-single digits organically, driven by volume growth and price
realization.
The reported revenue reflects a 2.9% positive impact from acquisitions.
8Adjusted operating margin in the region increased 20 basis points to 30.1%.
The adjusted operating margin increase is attributable to favorable volume leverage as well as PPII, inclusive of transactional foreign currency headwinds, which was positive on a dollar basis and a 10-basis point tailwind to margin rate.
Acquisitions were a 40-basis point headwind to margin rate.
The International segment revenues were up 16.2% (down 1.2% on an organic basis).
The organic revenue decrease was primarily driven by weaker demand in our core European markets.
Reported revenue reflects a 14.3% net positive impact from acquisitions and divestitures and a 3.1% tailwind from foreign currency.
Adjusted operating margin in the region decreased 70 basis points to 12.4%, driven by volume declines and a PPII headwind, offset by favorable impacts from acquisitions.
5Margin rate increased 440 basis points sequentially as the company worked to improve production rates following the ERP disruption experienced in first-quarter 2026.
Interest expense for second-quarter 2026 was $24.8 million, an increase of $0.2 million.
Other expense, net for second-quarter 2026 was $2.0 million, compared to other income, net of $5.3 million.
Other expense, net for second-quarter 2026 includes a $3.7 million non-cash pension settlement charge, which is excluded from adjusted EPS.
The company’s effective tax rate for second-quarter 2026 was 19.0%, compared with 20.3%.
The company’s adjusted effective tax rate for second-quarter 2026 was 19.7%, compared with 20.7%.
Cash Flow and Liquidity
Year-to-date available cash flow for 2026 was $260.8 million, a decrease of $14.6 million versus the prior-year period.
The decline in year-to-date available cash flow was primarily driven by higher receivables due to the timing of revenue, which was stronger in the latter part of the second quarter.
The company ended second-quarter 2026 with cash and cash equivalents of $320.6 million and total debt of $2,031.1 million.
Capital return
Share Repurchase and Dividends
In the second quarter of 2026, the company repurchased approximately 0.9 million shares for approximately $120 million and paid quarterly dividends of $0.55 per ordinary share or approximately $47 million.
Outlook
2026 Full-Year Outlook
(All comparisons are year-over-year, unless otherwise noted)
2The company is raising its full-year 2026 reported revenue growth outlook to a range of 7.5% to 8.5% and is raising its organic growth outlook to a range of 3.5% to 4.5%, after excluding the expected impacts of acquisitions, divestitures and foreign currency movements.Guidance raised
3The company is raising the outlook for full-year 2026 adjusted EPS to be in the range of $8.85 to $9.00.Guidance raised
The company is updating the outlook for full-year 2026 reported EPS and expects it to be in the range of $7.95 to $8.10.
Adjustments to 2026 EPS include estimated impacts of approximately $0.60 per share for acquisition-related amortization, as well as $0.20 per share for restructuring and $0.10 for M&A and other adjustments.
The outlook does not include the impact of potential IEEPA tariff refunds.
The outlook continues to assume a full-year adjusted effective tax rate of approximately 18% to 19%.Guidance reaffirmed
The outlook assumes an average diluted share count for the full year of approximately 85.9 million shares.
The company continues to expect full-year available cash flow to be 85% to 95% of adjusted net income.Guidance reaffirmed
Results
SELECTED OPERATING SEGMENT INFORMATION
(1) Adjustments to operating income for the three months ended June 30, 2026, consist of $6.9 million of restructuring charges and acquisition and integration expenses and $17.2 million of amortization expense related to acquired intangible assets.
Adjustments to operating income for the three months ended June 30, 2025, consist of $7.5 million of restructuring charges and acquisition and integration expenses, and $14.7 million of amortization expense related to acquired intangible assets.
(2) Adjustments to earnings before income taxes for the three months ended June 30, 2026, consist of the adjustments to operating income discussed above, as well as a $0.8 million impairment on a non-operating investment and a $3.7 million non-cash pension settlement charge.
Adjustments to earnings before income taxes for the three months ended June 30, 2025, consist of the adjustments to operating income discussed above.
(3) Adjustments to the provision for income taxes for the three months ended June 30, 2026 and 2025, consist of $7.2 million and $5.3 million, respectively of tax expense related to the excluded items discussed above.
(1) Adjustments to operating income for the six months ended June 30, 2026, consist of $13.5 million of restructuring charges and acquisition and integration expenses and $34.2 million of amortization expense related to acquired intangible assets.
Adjustments to operating income for the six months ended June 30, 2025, consist of $9.6 million of restructuring charges and acquisition and integration expenses and $29.6 million of amortization expense related to acquired intangible assets.
(2) Adjustments to earnings before income taxes for the six months ended June 30, 2026, consist of the adjustments to operating income discussed above, as well as a $0.8 million impairment on a non-operating investment, $3.7 million non-cash pension settlement charge, and a $0.1 million adjustment to a previously recorded loss on divestiture.
Adjustments to operating income for the six months ended June 30, 2025, consist of the adjustments to operating income discussed above.
(3) Adjustments to the provision for income taxes for the six months ended June 30, 2026 and 2025, consist of $13.0 million and $9.3 million, respectively of tax expense related to the excluded items discussed above.
RECONCILIATION OF GAAP TO NON-GAAP REVENUE AND OPERATING INCOME BY REGION
RECONCILIATION OF GAAP REVENUE GROWTH TO NON-GAAP ORGANIC REVENUE GROWTH BY REGION
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