Allegion (ALLE) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered 5.4% revenue growth, strong margin expansion, and robust cash flow, led by Americas non-residential demand and supported by acquisitions and innovation.

• Adjusted EPS rose 20% to $1.86, and net earnings increased 19.7% to $148.2M; dividend increased for the 11th consecutive year, with $44M paid and $40M in share repurchases.

• Three bolt-on acquisitions (Next Door, Lemaar, Trimco) expanded specialty door, security, and hardware portfolios in the Americas and Australia.

• Awarded Gallup Exceptional Workplace Award for the second consecutive year.

Financial highlights

• Q1 revenue was $941.9M, up 5.4% year-over-year; organic revenue grew 4% driven by price and volume in Americas non-residential.

• Adjusted operating margin rose 150 bps to 24.2%; adjusted EPS of $1.86 increased 20% year-over-year.

• Net earnings for Q1 2025 were $148.2M, up from $123.8M; operating income increased 14.1% to $196.4M.

• Available cash flow reached $83.4M, up nearly 250% from last year, driven by higher earnings and working capital improvements.

• Gross margin improved to 44.9% from 43.8% year-over-year.

Outlook and guidance

• Full-year 2025 adjusted EPS guidance reaffirmed at $7.65–$7.85, including the impact of $80M in tariffs, which are expected to be offset by pricing actions.

• Full-year available cash flow projected at 85–90% of adjusted net income.

• Non-residential markets, especially institutional verticals, remain resilient; residential expected to stay soft due to high mortgage rates and tariff uncertainty.

• No update to revenue outlook for FX or tariffs, but potential upside if current trends persist.

• Assumes average diluted share count of 86.7M and adjusted effective tax rate of 17%–18%.