Allegion (NYSE:ALLE) reported fourth-quarter and full-year 2025 results that management described as a “strong year,” highlighted by high single-digit enterprise revenue growth, more than $600 million in acquisitions, and continued investment in product innovation and the company’s electronics portfolio.
Fourth-quarter results and full-year cash generation
Senior Vice President and CFO Mike Wagnes said fourth-quarter revenue was “over $1 billion,” an increase of 9.3% versus 2024. Organic revenue rose 3.3%, which the company attributed to price realization, partially offset by volume declines in Americas residential and international businesses. Adjusted operating margin was 22.4%, up 30 basis points year over year.
For the full year, Wagnes noted available cash flow of $685.7 million, up 17.6% from the prior year, driven primarily by higher EBITDA. He added that the company expects 2026 available cash flow conversion of approximately 85% to 95% of adjusted net income. Allegion ended the year with net debt to adjusted EBITDA of 1.6x, which management said supports continued capital deployment.
Segment performance: Americas steady, international boosted by M&A and currency
In the Americas segment, revenue was $795.5 million, up 6.1% reported and up 4.8% organically, led by the non-residential business. Wagnes said non-residential increased high single digits organically, driven by a combination of price and volume growth, and that demand remained healthy given Allegion’s broad end-market exposure.
Americas residential, however, declined high single digits. Wagnes said favorable price was more than offset by volume declines as residential markets remained soft. During the Q&A, CEO John Stone said the Americas residential business “ended the year softer than we had contemplated,” calling the year “a little choppy,” including mid-single-digit growth in the third quarter tied to a new product launch followed by a “pretty soft Q4.” He said 2026 has “started off better” in residential, but the company is taking what it views as a “prudent assumption” that residential remains soft this year.
Electronics was a bright spot in the Americas, with Wagnes saying electronics revenue was up low double digits in the quarter and for the full year 2025, and continues to be a long-term growth driver.
Americas adjusted operating income was $216.2 million, up 5.4%, but adjusted operating margin declined 30 basis points. Wagnes said price and productivity, net of inflation and investment, was a 30 basis point headwind to margin rates, although it was positive in dollars as the company offset higher inflation. He also cited favorable mix offsetting residential volume deleverage.
International revenue was $237.7 million, up 21.5% reported but down 2.3% organically. Wagnes said growth in electronics was more than offset by weakness in mechanical. Net acquisitions contributed 16 points of revenue growth, and currency added 7.8 points. International adjusted operating income rose 27.5% to $39.4 million, while adjusted operating margin increased 90 basis points, driven by accretive acquisitions and favorable price and productivity net of inflation and investment.
Capital allocation and acquisitions
Stone said 2025 included approximately $630 million of capital deployed for acquisitions. He described the deals as aligned with the strategy outlined at Allegion’s May Investor Day, including additions to the core mechanical portfolio as well as electronics and complementary software.
Stone said the acquisition pipeline remains active heading into 2026 and emphasized that the company intends to remain disciplined to drive returns. In response to a question about competition for deals, Stone said the pipeline is “very active” in both the Americas and international segments and remains consistent with Allegion’s strategic focus on mechanical, electronics, and software, adding that the company remains focused on shareholder returns and maintaining a “right to play and a right to win” approach.
On shareholder returns, Stone said Allegion paid $175 million in dividends in 2025 and announced its 12th consecutive annual dividend increase. The company also repurchased $80 million of shares during 2025, though it did not repurchase shares in the fourth quarter. Stone said the company intends, at a minimum, to offset dilution from share-based compensation and reiterated a “balanced, consistent, and disciplined” approach to capital deployment with a priority on investing for growth.
Product investment and portfolio positioning
Stone highlighted product and innovation investments, including the September launch of Schlage Performance Series locks, positioned to support growth in the non-residential aftermarket. He also pointed to the 2024 release of Von Duprin 70 Series exit devices and said these offerings are complemented by mid-tier LCN closers, giving the company a broader suite of commercial-grade offerings across more price points.
2026 outlook: growth led by Americas non-residential and electronics
Management initiated 2026 adjusted EPS guidance of $8.70 to $8.90 per share. Stone said the midpoint implies approximately 8% growth and includes an estimated $0.10 headwind from a higher tax rate. The company expects total revenue growth of 5% to 7% and organic growth of 2% to 4%, including roughly one point of foreign currency translation and two points of carryover from M&A, primarily in Allegion International.
For the Americas, management expects low- to mid-single-digit organic growth from price and volume, led by non-residential. Stone said volume growth in non-residential is expected to be similar to 2025 levels and supported by specification-writing trends, while price contribution is expected to be more modest due to lower anticipated inflation. Residential is expected to remain soft, with the Americas residential business expected to be down slightly. International is expected to deliver modest organic growth led by electronics, with mechanical markets described as largely stable.
On pricing dynamics, management said it expects 2026 to feature more list-price increases rather than surcharges and reiterated that pricing should be somewhat lower than 2025 in line with a lower inflation assumption. Wagnes also said the company expects price and productivity to be positive on a dollar basis in 2026 and not negative on a margin-rate basis.
During Q&A on margins, Wagnes attributed fourth-quarter Americas margin pressure primarily to the sharp residential volume decline. Looking to 2026, he noted the company faces a difficult first-quarter comparison but said the underlying fundamentals and incremental margin framework discussed at Investor Day remain intact beyond that period.
About Allegion (NYSE:ALLE)
Allegion plc (NYSE: ALLE) is a global provider of security products and solutions focused on ensuring the safety and security of people and property. The company was formed in December 2013 through a corporate spin-off from Ingersoll Rand and is headquartered in Dublin, Ireland. Allegion’s core mission is to deliver innovative mechanical and electronic access control systems for a wide range of end markets, including commercial buildings, residential properties, institutional facilities, and industrial sites.
The company’s product portfolio spans mechanical locksets, door closers, exit devices, key systems and cylinders, as well as a growing suite of electronic and smart access control offerings.
