10-Q · July 23, 2026
Allegion posted a strong Q2, with revenue up 12.7% to $1.15 billion, diluted EPS up 16.2% to $2.15, and operating margin expanding to 22.1%. Americas drove the improvement, whereas International grew revenue but…
Earnings analysis · 10-Q
ALLE earnings analysis
Filed October 22, 2026 · Our reading of the company's report
The latest report
Allegion delivered a strong third quarter, with revenue up 9.6% year over year to $1,172.6 million, diluted EPS up to $2.59, and operating margin expanding 250 basis points to 24.3%. The Americas segment produced the…
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Allegion delivered a strong third quarter, with revenue up 9.6% year over year to $1,172.6 million, diluted EPS up to $2.59, and operating margin expanding 250 basis points to 24.3%. The Americas segment produced the bulk of the growth and margin improvement, while International revenue was nearly flat and profitability declined. Cash generation and liquidity remain solid, although the tariff-refund benefit, International weakness, acquisition activity and restructuring charges create comparability and execution risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $2.59
What stood out
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Revenue and EPS accelerated
Third-quarter revenue was $1,172.6 million, up $102.4 million, or 9.6%, from $1,070.2 million in the prior-year quarter and approximately 2.0% from $1,150 million in Q2 2026. Diluted EPS increased to $2.59 from $2.18 year over year and $2.15 sequentially.
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Strong margin expansion
Gross margin increased to approximately 46.8% from 45.8% in Q3 2025 and 44.9% in Q2 2026. Operating margin expanded to 24.3% from 21.8% year over year, driven partly by $19.9 million of tariff refunds, pricing and productivity, and favorable volume/product mix.
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Americas drove segment performance
Allegion Americas led growth, with revenue of $942.4 million, up 11.7%, and segment operating income of $294.6 million, up 21.5%. Its segment margin improved 260 basis points to 31.3% from 28.7%.
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Operating cash flow improved
Operating cash flow for the nine months was $604.0 million, up from $543.7 million in the prior-year period. Capital expenditures were $64.6 million versus $58.5 million, implying calculated nine-month free cash flow of approximately $539.4 million.
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Liquidity supported shareholder returns
Cash increased to $388.1 million from $356.2 million at December 31, 2025, despite $280.3 million of share repurchases, $140.2 million of dividends and $74.7 million of acquisition spending during the first nine months.
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Pricing and electronics remained tailwinds
Management reported high-single-digit third-quarter revenue growth driven by 3.8% pricing, 3.4% volume and 2.6% acquisitions/divestitures. Electronic-product revenue increased by a low-double-digit percentage in the Americas, and management expects continued electronic-product growth in 2026.
What to watch
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Tariff benefit and trade exposure
The $19.9 million tariff-refund benefit included in nine-month operating income may not recur; management said the impact of future IEEPA tariff refunds is not expected to be material. The company sources approximately 20%–25% of COGS from Mexico, less than 5% from China and 5%–10% from other non-U.S. countries.
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International volume and margin pressure
International performance remains pressured: third-quarter volume declined 1.5%, segment operating income fell 12.7% to $17.2 million, and margin contracted to 7.5% from 8.7%. Management attributed the pressure primarily to market conditions in Western Europe, higher restructuring costs and unfavorable mix.
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Acquisition and restructuring execution
Execution and capital-allocation risk increased with the $88.7 million Overly acquisition completed on October 2, 2026, following $69.3 million spent on DCI, while the company recorded $13.8 million of restructuring expense and anticipates additional charges. Total debt was $2,032.0 million at September 30, 2026, up from $1,980.1 million at year-end.
Management's outlook
The 10-Q does not provide numeric full-year revenue or EPS guidance. Management expects continued growth in electronic products in 2026 and expects operating cash flows to meet current financing needs for at least the next 12 months.
Earlier filings 4
10-Q · April 28, 2026
Allegion reported Q1 net revenues of $1,033.6 million, up $91.7 million (+9.7%) versus Q1 2025, while operating income was $195.3 million (operating margin ~18.9%), essentially flat versus $196.4 million a year ago but…
10-K · February 17, 2026
Allegion reported fiscal 2025 Net revenues of $4,067.3 million and Operating income of $859.5 million (implying ~21.1% operating margin), reflecting scale and durable profitability. The company emphasises a broad…
10-Q · October 24, 2024
Allegion reported Q3 net revenues of $967.1 million, up $49.2 million (+5.4%) versus the prior-year quarter, with cost of goods sold of $535.0 million resulting in gross margin of ~44.7% and operating income of $215.0…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.