Allegion — Financial Results
Revenue Grew 7.8% to $4.1 Billion, Driven by Pricing and Acquisitions
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Net revenues | $4,067.3M | $3,772.2M | +7.8% |
| Operating income | $859.5M | $780.7M | +10.1% |
| Operating margin | 21.1% | 20.7% | +0.4pp |
| Diluted earnings per share | $7.44 | $6.82 | +9.1% |
Allegion posted broad-based growth in 2025, with pricing contributing 3.1%, acquisitions another 3.1%, and underlying volume adding 1.0%. Operating margin (profit as a percentage of sales) ticked up to 21.1%, meaning the company is converting slightly more of each revenue dollar into profit than it did the year before.
Americas Segment Is the Profit Engine, with Electronics Growing Fast
| Metric | 2025 | 2024 |
|---|---|---|
| Americas revenue | $3,218.8M | $3,012.4M |
| Americas segment operating margin | 27.9% | 27.1% |
The Americas segment — home to brands like Schlage and Von Duprin — accounts for roughly 79% of total revenue and earns margins nearly three times higher than the International segment. Within Americas, electronic security products (smart locks, access control systems) grew by a low-double-digit percentage, reinforcing management's view that electronics are a long-term growth engine. Residential products were a soft spot, with volumes declining slightly.
A $631.6 Million Acquisition Spree Is Reshaping the Business
Allegion spent $631.6 million on acquisitions in 2025, compared to $147.2 million in 2024 — more than four times the prior year's pace. The headline deal was ELATEC, a German manufacturer of security and access technology acquired in July 2025, which expands Allegion's electronics portfolio in Europe. Acquired businesses contributed $93 million of revenue in 2025 since their purchase dates, and added $24.4 million to operating income. This is a meaningful strategic pivot toward both electronics and international scale.
Operating Cash Flow Jumped to $783.8 Million
| Cash Flow Category | 2025 | 2024 |
|---|---|---|
| Operating activities | $783.8M | $675.0M |
| Investing activities | ($685.5M) | ($228.4M) |
| Financing activities | ($266.7M) | ($394.5M) |
The business generated $108.8 million more cash from operations than in 2024, driven by higher earnings and better working capital management. The sharp increase in cash used for investing reflects the acquisition activity above. Despite heavy spending, the balance sheet remains manageable.
Tariffs Are a Known Risk, Actively Being Managed
Allegion sources roughly 20–25% of its cost of goods sold (what it costs to make its products) from Mexico, under 5% from China, and 5–10% from other non-US countries. U.S. tariff announcements throughout 2025 created cost pressure, which the company offset through pricing actions. Management is continuing to monitor the situation and has not quantified the potential future impact — this is worth watching, particularly given the Mexico exposure.
Shareholder Returns Continue While the Revolving Credit Line Was Upsized
Allegion returned $255.3 million to shareholders in 2025 through $175.3 million in dividends ($0.51 per share quarterly) and $80 million in share buybacks, though buybacks were scaled back from $220 million in 2024 to fund acquisitions. On the debt side, the company upsized its revolving credit facility (a flexible borrowing line) from $750 million to $1 billion and extended its maturity to 2030, giving it more financial headroom for future moves.