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August 18, 2025 • 3 min read
Today, we're diving into the latest financial report from Allegion plc (ticker: ALLE), a global provider of security products and solutions you might know from brands like Schlage locks and Von Duprin exit devices. Their Q2 2025 quarterly report gives us a fresh look at their performance. Let's unpack the numbers from their recent 10-Q filing with the SEC to see how the company is faring.
Allegion reported a strong second quarter, with total net revenues reaching $1.02 billion, a 5.8% increase from the same period last year. This growth wasn't reliant on a single factor but came from a balanced mix of strategies:
This combination shows Allegion is executing on both organic growth (selling more at better prices) and its M&A strategy.
So, how did this revenue translate to the bottom line? Net earnings for the quarter were $159.7 million, or $1.85 per diluted share, a modest increase from $155.4 million, or $1.77 per share, a year ago.
Operating income, a key measure of core profitability, rose to $219.7 million. However, the operating margin—operating income as a percentage of revenue—remained nearly flat at 21.5%. This indicates that while sales are growing, the benefits are being partially offset by inflation and strategic investment spending.
To visualize how Allegion’s revenue flows through its costs to become profit, here is a breakdown of their Q2 2025 income statement.
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As the chart illustrates, the largest expenses are the Cost of Goods Sold (the direct costs of making their products) at $555.5 million and Selling and Administrative (SG&A) expenses at $246.8 million.
A deeper look reveals a significant difference in performance between Allegion’s two main business segments.
Allegion Americas: This segment, covering North and South America, was the standout performer. Revenues grew a robust 6.6% to $821.5 million. More impressively, its operating income jumped 10.4% to $236.6 million, and its operating margin expanded to a very healthy 28.8%. This strength was driven by higher sales volume, better pricing, and contributions from recent acquisitions.
Allegion International: The international business faced more difficulties. While revenues increased by 2.9% to $200.5 million, this was mostly due to favorable currency exchange rates; actual sales volume declined by 3.2%. As a result, operating income fell 11.3% to $15.7 million, and the operating margin tightened from 9.1% to 7.8%. Higher costs related to acquisitions and restructuring also weighed on profitability.
Allegion's Q2 results show a company leveraging the strength of its core Americas business to offset challenges in its international markets. The company continues to actively shape its portfolio through acquisitions and return value to its investors, having repurchased $40 million of its shares in the second quarter and paying consistent dividends. While the international segment and persistent inflation present ongoing hurdles, Allegion's strong performance in its largest market highlights its operational resilience.
Last updated: August 18, 2025