Allegion Reports 5.8% Revenue Growth in Q2 2025, Expands Portfolio with Multiple Acquisitions

Allegion plc reported a solid financial performance for the second quarter of 2025, with net revenues reaching $1,022.0 million, a 5.8% increase from $965.6 million in the same period of 2024. The company's operating income for the quarter was $219.7 million, slightly up from $209.0 million year-over-year, while net earnings also saw a modest rise to $159.7 million from $155.4 million. The diluted earnings per share increased to $1.85, compared to $1.77 in the prior year. For the first half of 2025, net revenues totaled $1,963.9 million, up 5.6% from $1,859.5 million, with operating income increasing to $416.1 million from $381.1 million.

The company experienced notable changes in its cost structure, with cost of goods sold (COGS) as a percentage of revenues decreasing to 54.4% from 55.7% in the previous year. Selling and administrative expenses also increased, accounting for 24.1% of revenues compared to 22.7% in 2024. The increase in revenues was attributed to improved pricing, higher volumes, and contributions from recent acquisitions, which collectively offset the impact of unfavorable foreign currency exchange rates.

Strategically, Allegion has been active in expanding its portfolio through acquisitions. In the first half of 2025, the company completed several acquisitions, including Next Door Company, Lemaar Pty Ltd, Trimco Hardware, and Nova Hardware Pty Ltd, for a total consideration of approximately $65 million. Additionally, in July 2025, Allegion acquired ELATEC for approximately $389 million, further enhancing its global electronics portfolio. These acquisitions are expected to bolster Allegion's market presence and product offerings in both the Americas and international markets.

Operationally, Allegion reported a strong performance in its Allegion Americas segment, which saw net revenues increase by 6.6% to $821.5 million for the second quarter. The Allegion International segment also contributed, with a 2.9% increase in net revenues to $200.5 million. The company noted a continued demand for electronic security products, which remains a long-term growth driver. However, the residential product segment faced challenges due to softer market conditions. As of June 30, 2025, Allegion's total assets stood at $4,914.8 million, with total liabilities of $3,128.3 million, reflecting a solid balance sheet.

Looking ahead, Allegion anticipates continued growth driven by demand for non-residential products and electronic security solutions. The company is closely monitoring macroeconomic conditions, including potential impacts from tariffs and inflation. Allegion expects its cash flows from operations to remain sufficient to support its financial position and strategic initiatives over the next 12 months, while maintaining compliance with its debt covenants.