Allegion's Q4 Earnings Miss Estimates, Revenues Increase Y/Y

Core Insights - Allegion plc's fourth-quarter 2025 adjusted earnings of $1.94 per share missed the Zacks Consensus Estimate of $2.01, but increased 4.3% year over year [1] - For the full year 2025, adjusted earnings were $8.14 per share, reflecting an 8.1% year-over-year increase [1] Revenue Details - Allegion's revenues for the fourth quarter were $1.03 billion, a 9.3% increase year over year, with organic revenues up 3.3% driven by price realization [2] - Acquired assets contributed 4.4% to revenue growth, while foreign currency effects added 1.6% [2] - For the full year 2025, net revenues reached $4.07 billion, up 7.8% year over year [2] - Revenues from Allegion Americas were $795.5 million, a 6.1% increase year over year, accounting for 77% of total revenues [2] - Allegion International revenues were $237.7 million, up 21.5% year over year, representing 23% of total revenues [3] Operating Income and Margins - Operating income for Allegion Americas was $206.1 million, up 6.3% year over year [3] - Segmental operating income for Allegion International increased 66.1% year over year to $29.4 million [3] - Cost of revenues rose 8.5% year over year to $573.7 million, while gross profit increased 10.3% to $459.5 million, resulting in a gross margin of 44.5%, up 40 basis points [4] - Adjusted operating income increased 10.6% year over year to $231.3 million, with an adjusted margin of 22.4%, up 30 basis points [5] Balance Sheet and Cash Flow - At the end of Q4 2025, Allegion had cash and cash equivalents of $356.2 million, down from $503.8 million at the end of 2024 [6] - Long-term debt remained stable at $1.98 billion [6] - The company generated net cash of $783.8 million from operating activities, a 16.1% increase year over year [6] - Capital expenditure was $98.1 million, up 6.5% year over year, with available cash flow for the full year at $685.7 million [6] 2026 Outlook - Allegion expects 2026 revenues to grow by 5-7% and projects adjusted earnings per share in the range of $8.70-$8.90 [9] - Organic revenues are anticipated to grow by 2-4% [9] - The company estimates available cash flow to be 85-95% of adjusted net income, with an effective tax rate projected at approximately 18-19% [9] Shareholder Returns - Allegion repurchased shares for $80.0 million and paid out dividends totaling $175.3 million, reflecting a 5% year-over-year increase [8]