Allegion's Q3 Earnings & Revenues Surpass Estimates, Increase Y/Y

Allegion plc’s ALLE third-quarter 2025 adjusted earnings of $2.30 per share beat the Zacks Consensus Estimate of $2.21. The bottom line increased 6.5% year over year.

ALLE’s Revenue Details

Allegion’s revenues were $1.07 billion, which increased 10.7% year over year. Organic revenues increased 5.9%, driven by solid momentum in the non-residential business in the Americas region. Revenues beat the Zacks Consensus Estimate of $1.04 billion.

Acquired assets boosted revenues by 3.9%. Foreign currency had a positive impact of 0.9%.

ALLE reports revenues under two segments. A brief discussion of quarterly results is provided below:

Revenues from Allegion Americas increased 7.9% year over year to $844 million. The figure accounted for 78.9% of the quarter’s revenues. Our estimate for segmental revenues was $817.2 million. Organic revenues increased 6.4%, driven by solid momentum in the residential and non-residential businesses.

Operating income for the segment was $242.4 million, up 9.6% year over year. Our estimate was $244.7 million.

Revenues from Allegion International were $226.2 million, up 22.5% year over year. The metric accounted for 21.1% of the quarter’s revenues. Our estimate for segmental revenues was $206.6 million. Organic revenues increased 21.1%.

Segmental operating income was $19.7 million, up 10.1% year over year. Our estimate was $26.1 million.

Allegion’s Margin Profile

In the quarter, Allegion’s cost of revenues increased 8.5% year over year to $580.4 million. Gross profit was $489.8 million, up 13.4% year over year, while the gross margin jumped 110 basis points (bps) to 45.8%.

Selling and administrative expenses increased 17.9% year over year to $256.0 million. Adjusted EBITDA was $274.1 million, reflecting a year-over-year increase of 10.4%. The margin was 25.7%, flat on a year-over-year basis.

Adjusted operating income increased 10.1% year over year to $257.4 million. The adjusted margin was 24.2%, up 10 basis points year over year. Interest expenses were $26.6 million, down 7.6% year over year. The effective tax rate was 9.8%, down from 10.5% in the year-ago quarter.

ALLE’s Balance Sheet and Cash Flow

While exiting third-quarter 2025, Allegion had cash and cash equivalents of $302.7 million compared with $503.8 million at the end of 2024. Long-term debt was $2.06 billion compared with $1.98 billion at the end of 2024.

In the first nine months of 2025, ALLE generated net cash of $543.7 million from operating activities, reflecting an increase of 19.2% year over year. Capital expenditure was $58.5 million, down 14% year over year. For the first nine months, the available cash flow was $485.2 million.

Allegion repurchased shares for $80.0 million. Dividends paid out totaled $131.4 million, reflecting an increase of 4.6% year over year.

Allegion’s 2025 Outlook

The company has raised the 2025 guidance. Allegion expects revenues to increase in the range of 7-8% from the year-ago level compared with 6.5-7.5% anticipated earlier.  ALLE anticipates organic revenues to grow in the range of 3.5-4.5%.

Adjusted earnings are projected to be in the range of $8.10-$8.20 per share compared with $8.00-$8.15 expected earlier.

The company estimates available cash flow to be 85-95% of adjusted net income. Adjusted effective tax rate is projected to be approximately 17-18%.

ALLE’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Dover Corporation DOV reported earnings of $2.62 per share in third-quarter 2025, beating the Zacks Consensus Estimate of $2.50. This compares with earnings of $2.27 per share a year ago.

Dover posted revenues of $2.08 billion in the quarter, missing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $1.98 billion.

Ardagh Metal Packaging S.A. AMBP came out with earnings of eight cents per share in the third quarter of 2025, beating the Zacks Consensus Estimate of seven cents. This compares with earnings of eight cents per share a year ago.

Ardagh Metal posted revenues of $1.43 billion in the quarter, beating the Zacks Consensus Estimate by 2.7%. This compares with year-ago revenues of $1.31 billion. 

Packaging Corporation of America PKG reported earnings of $2.73 per share in the third quarter, missing the Zacks Consensus Estimate of $2.83. This compares with earnings of $2.65 per share a year ago.

Packaging Corp. posted revenues of $2.31 billion in the quarter, surpassing the Zacks Consensus Estimate by 2.2%. This compares with year-ago revenues of $2.18 billion.

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