Financial Performance - Allegion reported Q1 2025 net revenues of $941.9 million, a 5.4% increase compared to Q1 2024, with organic revenue growth of 4.0%[3][4] - Net earnings for Q1 2025 were $148.2 million, or $1.71 per share, representing a 21.3% increase in EPS compared to $1.41 in Q1 2024[6][24] - Adjusted net earnings were $161.2 million, or $1.86 per share, up 20.0% from $1.55 in the prior year[3][6] - Operating income for Q1 2025 was $196.4 million, a 14.1% increase, with an operating margin of 20.9%, up from 19.3%[5][6] - Total net revenues for Q1 2025 reached $941.9 million, compared to $893.9 million in Q1 2024, reflecting a year-over-year increase of 5.4%[27] - Operating income for the total company improved to $196.4 million in Q1 2025, compared to $172.1 million in Q1 2024, marking a 14.1% increase[27] - Net earnings for Q1 2025 increased to $148.2 million, up from $123.8 million in Q1 2024, representing a growth of 19.6%[30] Segment Performance - The Americas segment revenues increased by 6.8%, with an organic growth of 4.9%, driven by price realization and volume growth[6][7] - Allegion Americas segment reported net revenues of $757.8 million, a 6.8% increase from $709.3 million in the same period last year[33] - The International segment revenues decreased by 0.3%, but showed a 0.9% organic growth, primarily due to price increases[8] - Organic revenue growth for Allegion Americas was 4.9% in Q1 2025, compared to a decline of 4.3% in Q1 2024[36] - Allegion International segment experienced a slight revenue decline of 0.3% in Q1 2025, while organic growth was 0.9%[36] Cash Flow and Financial Position - Year-to-date available cash flow for 2025 was $83.4 million, an increase of $59.5 million compared to the prior-year period[11] - Available cash flow for Q1 2025 was $83.4 million, significantly higher than $23.9 million in Q1 2024[34] - Cash and cash equivalents at the end of Q1 2025 totaled $494.5 million, up from $391.8 million at the end of Q1 2024[34] Future Outlook - Allegion expects full-year 2025 reported EPS to be in the range of $7.05 to $7.25, or $7.65 to $7.85 on an adjusted basis[16] - Allegion estimates tariff costs of approximately $80 million in 2025, expecting to offset these costs through pricing actions[15] Shareholder Actions - The company repurchased $40.0 million in ordinary shares during Q1 2025, consistent with the previous year[34] Tax Efficiency - The effective income tax rate for Q1 2025 was 15.4%, down from 19.0% in Q1 2024, indicating improved tax efficiency[30] Acquisitions - The company has acquired two businesses in Q1 2025, Next Door Company and Lemaar, to expand its core operations[3][6]

Core Viewpoint - Allegion plc (ALLE) is expected to report first-quarter 2025 results on April 24, with revenue estimates of $931.6 million, reflecting a 4.2% year-over-year growth, and earnings per share (EPS) estimated at $1.68, indicating an 8.4% increase from the previous year [1]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for ALLE's first-quarter revenues is $931.6 million, indicating a growth of 4.2% from the prior-year quarter [1]. - The consensus mark for earnings is pinned at $1.68 per share, which has remained steady in the past 30 days, reflecting an 8.4% growth from the year-ago quarter [1]. - Allegion has delivered better-than-expected results in each of the trailing four quarters, with an average earnings surprise of 9.9% [2]. Group 2: Segment Performance Insights - The Allegion Americas segment is expected to see a revenue increase of 5.5% year-over-year to $748.5 million, driven by stable demand across various end markets including education, healthcare, government, hospitality, and retail [3]. - The Allegion International segment's performance is anticipated to benefit from the increased adoption of advanced technologies in the electronics security products market, such as wireless locks and mobile-enabled smart locks [4]. Group 3: Strategic Acquisitions - Allegion has focused on expanding its product offerings through acquisitions, including Krieger Specialty Products and Unicel Architectural Corp. in June 2024, which enhanced its door and frame portfolio and expanded its non-residential product offerings [5]. - The acquisition of Dorcas in March 2024 strengthened Allegion's security products portfolio and enhanced its presence in the healthcare and education sectors [6]. Group 4: Cost and Margin Considerations - Rising operating costs due to increased material costs and investments in new products and growth initiatives are expected to impact the company's bottom line, with a projected 4.4% increase in the cost of sales year-over-year [7]. - The adjusted operating margin is anticipated to decline by 10 basis points to 21.1% in the first quarter [7]. Group 5: Foreign Exchange Impact - Allegion's extensive geographic presence subjects it to foreign exchange headwinds, with a stronger U.S. dollar likely to negatively affect its overseas business [8]. Group 6: Earnings Prediction Model - The current model does not predict an earnings beat for ALLE, as the Earnings ESP is 0.00% with both the Most Accurate Estimate and the Zacks Consensus Estimate at $1.68 per share [9][10].

Core Viewpoint - Allegion plc (ALLE) is positioned to benefit from strong business momentum, operational excellence, strategic acquisitions, and shareholder-friendly policies, focusing on growth opportunities and long-term market strength [1] Business Strength - Allegion is experiencing strong momentum across its segments, with stable demand in non-residential markets such as education, healthcare, government, hospitality, and retail driving growth in the Americas segment, which saw a revenue increase of 6.4% year over year in Q4 2024 [2] - The Allegion International segment is benefiting from increased demand for electronic security products, with revenues rising 1.5% year over year in Q4 2024; for 2025, the Americas segment is expected to see low to mid-single-digit revenue growth, while the International segment's revenues are projected to remain flat [3] Accretive Acquisitions - Allegion is enhancing its business and product offerings through acquisitions, including the acquisition of Trimco Hardware in April 2025, which will strengthen its door and frame portfolio [4] - In June 2024, Allegion acquired Krieger Specialty Products and Unicel Architectural Corp, both of which have been integrated into the Americas segment to enhance its non-residential product portfolio [5] - The acquisition of Lemaar Pty Ltd. in February 2025 is expected to enhance Allegion's security and accessibility portfolio in Australia; overall, acquisitions contributed to a 2% increase in sales in Q4 [6] Stock Performance - Over the past three months, ALLE shares have declined by 3.7%, while the industry has seen an 11.7% decline; however, over the past two years, ALLE shares have increased by 23.2%, outperforming the industry growth of 9.1% [7] Rewards to Shareholders - Allegion is committed to enhancing shareholder value through dividends and share repurchases, having paid out $166.9 million in dividends in 2024, a 5.2% increase year over year, and repurchased shares worth $220 million [10] - As of the end of 2024, Allegion had $240 million remaining for share repurchases under its 2023-approved program; in February 2025, the company announced a 6% increase in its quarterly dividend rate to 51 cents per share [11] Estimate Revisions - The Zacks Consensus Estimate for ALLE's 2025 earnings is $7.73 per share, reflecting a 1.6% increase from the previous estimate; the 2026 earnings estimate is $8.15 per share, indicating a 5.1% rise [11]

Group 1: Acquisition Details - Allegion plc has acquired Trimco Hardware, including its brands and assets, through a subsidiary, with financial terms undisclosed [1] - Trimco, based in Los Angeles, specializes in high-performance and custom-designed door hardware for commercial and institutional markets [1] Group 2: Strategic Rationale - The acquisition aligns with Allegion's strategy to expand market share and customer base, enhancing its door and frame portfolio with Trimco's specialty solutions and innovation capabilities [2] - Trimco will be integrated into Allegion's Americas segment, led by senior vice president Dave Ilardi [3] Group 3: Growth Strategy - Acquisitions are a key component of Allegion's growth strategy, focusing on strategic buys and innovation to improve long-term results [4] - Allegion also acquired Krieger Specialty Products and Unicel Architectural Corp in June 2024, further strengthening its door and frame portfolio and non-residential business [5] Group 4: Market Position and Performance - Allegion holds a Zacks Rank 2 (Buy) and is positioned to benefit from stable demand in the Allegion Americas unit across sectors like education, hospitality, and retail [6] - Year-to-date, Allegion's stock has increased by 1.1%, contrasting with a 1.4% decline in the industry [6]

Core Insights - Allegion is showcasing innovative electronic access control technologies and services at ISC West 2025, emphasizing interoperability as a key aspect of their security solutions [1][2] - The company aims to provide seamless and secure access solutions by fostering integration across various technologies and manufacturers, enhancing customer choice and adoption of new technologies [2] Product Highlights - Schlage Mobile Credentials now support NFC credentials in Apple Wallet® and Google Wallet™, making Schlage the first provider to support mobile credentials on Wear OS by Google Smartwatches, enhancing convenience and security for users [3] - New Latch Retraction Mortise Solutions feature ultra-quiet, motor-driven latch retraction, designed for various access control and fire systems, providing a quieter solution for door operations [3] - Von Duprin's Outdoor Defense option protects exit devices from moisture and temperature variations, ensuring functionality in exterior applications [3] - Zentra™ offers a unified access system for multifamily properties, streamlining operations for property owners while enhancing security for residents [3] - The ND Series Keyed Privacy Indication Trim Options expand Schlage's indication offerings, featuring keyed unlocking and improved visibility [4] Collaborative Efforts - Allegion collaborates with the Partner Alliance for Safer Schools (PASS) to enhance school safety and security, providing resources and expert guidance to implement safety guidelines [5] - The Allegion Alliance Network fosters partnerships with other companies to broaden the range of products and services available to customers [2] Digital Solutions - Overtur™ is a cloud-based solution that facilitates collaboration on door security design and management, integrating with industry tools to streamline processes and reduce reliance on manual methods [8] - The Schlage XE360™ Series offers a next-generation wireless electronic lock designed for common area openings, enhancing operational efficiencies for multifamily property owners [8]

Core Viewpoint - Allegion's shares have increased by approximately 1.6% since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this positive trend leading up to the next earnings release [1] Estimates Movement - Estimates for Allegion have trended upward over the past month, indicating a positive outlook for the company [2] VGM Scores - Allegion has a Growth Score of B, a Momentum Score of D, and a Value Score of C, resulting in an aggregate VGM Score of B, which is favorable for investors not focused on a single strategy [3] Outlook - The upward trend in estimates and the magnitude of revisions suggest a promising outlook for Allegion, supported by a Zacks Rank of 2 (Buy), indicating expectations for above-average returns in the coming months [4]

Core Insights - Schlage introduces Advanced Rekey, a new rekeying solution aimed at enhancing home security and providing users with greater control over their locks [1][2] Product Features - Advanced Rekey allows builders and homeowners to efficiently manage key systems, facilitating a simple rekeying process without the need for professional assistance [2][7] - The solution is designed to be user-friendly, enabling anyone to rekey locks in a few simple steps, making it ideal for situations like lost keys or changes in homeownership [7] - Advanced Rekey enhances security by ensuring that old keys become inoperative after rekeying, thus preventing unauthorized access [7] Market Availability - The Advanced Rekey solution will be available to builders through dealers and wholesale partners in late 2025 [4] Company Background - Schlage is a brand under Allegion, which is recognized as a global leader in access solutions, focusing on safety and convenience [5]

Financial Data and Key Metrics Changes - Q4 2024 revenue was $945.6 million, an increase of 5.4% compared to 2023, with organic revenue increasing by 3.5% due to favorable price and volume [17][21] - Adjusted earnings per share for Q4 was $1.86, up $0.18 or 10.7% year-over-year [19] - Full year 2024 available cash flow was $582.9 million, a 12.9% increase from the previous year [20][29] Business Line Data and Key Metrics Changes - Americas segment revenue was $750 million, up 6.4% reported and 4.6% organically, with residential business up high-single-digits [22][23] - International segment revenue was $195.6 million, up 1.5% reported but down 0.7% organically, with acquisitions contributing positively [27] - Adjusted operating margin for the Americas increased by 70 basis points, while the international segment saw a decrease of 100 basis points due to lower volumes [26][28] Market Data and Key Metrics Changes - The institutional markets are showing stable growth, supported by healthy municipal bond issuance [34] - Dodge Institutional Indicators indicate positive territory for square footage starts, contributing to volume growth [34] - The international market, particularly in Germany, is facing challenges, impacting overall growth expectations [36][37] Company Strategy and Development Direction - The company is focused on capital deployment, returning cash to shareholders, and pursuing accretive tuck-in acquisitions [8][12] - Allegion plans to continue investing in R&D and product launches to enhance its market position [10][12] - The company anticipates continued growth in the Americas, particularly in non-residential and residential sectors, while expecting flat growth in international markets [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the institutional market and the potential for growth in 2025 [34][42] - The company expects total revenue growth of 1% to 3% and organic revenue growth of 1.5% to 3.5% for 2025 [35][36] - Management highlighted the importance of local funding sources for project work, which may insulate the company from broader economic uncertainties [110] Other Important Information - Allegion executed M&A transactions totaling $137 million in 2024, with plans for further acquisitions in 2025 [12][14] - The company announced its 11th consecutive dividend increase, indicating a commitment to returning value to shareholders [15] - Allegion's balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 1.6 times [30] Q&A Session Summary Question: Price-cost productivity investment equation - Management noted that the pricing dynamics were affected by timing of rebate accruals, not core pricing [56][57] Question: Sourcing of steel and aluminum - Management indicated that the impact of steel and aluminum tariffs is minimal, as most sourcing is domestic [59] Question: Adjusted operating margin guidance for 2025 - Management expects margin expansion in 2025, with the Americas leading this growth [66][75] Question: International growth guidance and China exit - The revenue from China was minimal, and the exit will have a small headwind for 2025 [77] Question: Non-residential business outlook - Management expressed optimism about non-residential business growth, supported by increased quoting activity [84] Question: M&A pipeline and margin profile - Management confirmed a healthy M&A pipeline, with a focus on high-quality targets [90] Question: Organic sales outlook and growth phasing - Management expects balanced growth across commercial and institutional sectors, with no significant back-end loading [95][96]

Core Insights - Allegion plc reported fourth-quarter 2024 adjusted earnings of $1.86 per share, surpassing the Zacks Consensus Estimate of $1.74, marking a year-over-year increase of 10.7% [1] - The company's revenues reached $945.6 million, reflecting a 5.4% year-over-year growth, and exceeded the Zacks Consensus Estimate of $939 million [2] Revenue Details - Revenues from Allegion Americas increased by 6.4% year over year to $750 million, accounting for 79.3% of total revenues, with organic revenues up 4.6% [2] - Allegion International's revenues were $195.6 million, a 1.5% year-over-year increase, but organic revenues decreased by 0.7% due to lower volume [3] Margin Profile - Allegion's cost of revenues rose by 3.3% year over year to $528.9 million, while gross profit increased by 8.1% to $416.7 million, resulting in a gross margin of 44.1% [4] - Adjusted operating income grew by 6% year over year to $209.1 million, with an adjusted margin of 22.1% [5] Balance Sheet and Cash Flow - At the end of Q4 2024, Allegion had cash and cash equivalents of $503.8 million, up from $468.1 million at the end of 2023, while long-term debt increased to $1.98 billion [6] - The company generated net cash of $675 million from operating activities, a 12.3% increase year over year, with available cash flow for the year at $582.9 million [6] Shareholder Returns - Allegion repurchased shares worth $220 million and paid dividends totaling $166.9 million, reflecting a 5.2% year-over-year increase [7] 2025 Outlook - The company anticipates revenue growth of 1-3% year-over-year, with organic revenues expected to rise by 1.5-3.5% [9] - Adjusted earnings are projected to be in the range of $7.65-$7.85 per share, with available cash flow estimated at 85-90% of adjusted net income [9]

Allegion plc (NYSE:ALLE) Q4 2024 Earnings Conference Call February 18, 2025 8:00 AM ET Company Participants Josh Pokrzywinski - Vice President of Investor Relations John Stone - President and Chief Executive Officer Mike Wagnes - Senior Vice President and Chief Financial Officer Conference Call Participants Jeffrey Sprague - Vertical Research Partners Julian Mitchell - Barclays Joe O'Dea - Wells Fargo Securities Timothy Wojs - Baird Brett Linzey - Mizuho Securities Christopher Snyder - Morgan Stanley Operat ...