Allegion (ALLE) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered record revenue and adjusted EPS, driven by strong execution, stable markets, and broad end-market exposure.

• Achieved 5.8% revenue growth and margin expansion, supported by favorable pricing, volume growth, and accretive acquisitions.

• Capital deployment accelerated, including four acquisitions year-to-date, share repurchases, and dividends.

• Full-year guidance for reported revenue and adjusted EPS was raised, with available cash flow outlook affirmed.

• Continued investment in organic growth, product innovation, and shareholder returns.

Financial highlights

• Q2 2024 revenue was $965.6 million, up 5.8% year-over-year; organic revenue increased 5.2%.

• Adjusted operating margin increased by 150 bps to 25.3%; adjusted EBITDA margin up 170 bps to 23.7%.

• Adjusted EPS was $1.96, up 11.4% year-over-year; net earnings were $155.4 million ($1.77 per share).

• Year-to-date available cash flow was $176 million, down 7.4% versus last year due to higher capex and working capital.

• Cash and cash equivalents at June 30, 2024: $747.5 million; total debt: $2,404.6 million.

Outlook and guidance

• Full-year reported revenue growth outlook raised to 2.5%-3.5%; organic growth expected at 1.5%-2.5%.

• Adjusted EPS guidance increased to $7.15-$7.30; GAAP EPS expected at $6.50-$6.65.

• Available cash flow outlook affirmed at $540 million-$570 million.

• Outlook assumes a $0.37 EPS headwind from global minimum tax and $0.52 per share in acquisition-related amortization.

• Management expects continued business growth in the second half of 2024, with stable residential and growing non-residential demand.