Financial Data and Key Metrics Changes - Q3 revenue exceeded $1 billion, marking a 10.7% increase compared to 2024, with organic revenue rising by 5.9% due to favorable pricing and volume [8][9] - Adjusted EPS for Q3 was $2.30, an increase of $0.14 or 6.5% year-over-year [9] - Year-to-date available cash flow reached $485.2 million, up 25.1% from the previous year [12] Business Line Data and Key Metrics Changes - The Americas segment reported revenue of $844 million, up 7.9% on a reported basis and 6.4% organically, driven by non-residential business demand [9][10] - The International segment delivered revenue of $226 million, a 22.5% increase on a reported basis and 3.6% organically, with acquisitions contributing significantly [11] Market Data and Key Metrics Changes - Non-residential business in the Americas showed mid-single-digit organic growth, while residential market demand remained soft [10][14] - International markets are expected to remain largely flat, with some growth driven by recent acquisitions [14][15] Company Strategy and Development Direction - The company is focused on long-term capital allocation for growth, with approximately $600 million allocated to acquisitions year-to-date [4][7] - Recent acquisitions, including UAP and Bressant, are aimed at strengthening the product portfolio and enhancing cost positions [6][11] Management's Comments on Operating Environment and Future Outlook - Management raised the 2025 adjusted EPS outlook to $8.10 to $8.20, reflecting strong execution and recent acquisitions [5][15] - The overall market conditions for 2026 are expected to be similar to 2025, with continued focus on price adjustments to offset inflation [15][16] Other Important Information - The company continues to pay dividends, amounting to $0.51 per share in Q3, totaling approximately $44 million [7] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 1.8 times [13] Q&A Session Summary Question: Update on spec writing and key verticals - Spec activity has accelerated in 2025, supporting organic growth in non-residential markets [20][22] Question: M&A pipeline and potential earnings accretion - The M&A pipeline remains strong across both reporting segments, with ongoing activity in portfolio expansion and complementary software [23][24] Question: Conversations with building owners and architects regarding macro uncertainty - Non-res project activity is healthy, with private finance returning to the market, indicating a positive environment [29][30] Question: International volume growth and momentum - International segment showed volume growth after previous declines, with electronics businesses performing well [32][33] Question: Adjusted operating margins and corporate costs - Margins are expected to expand in Q4, with corporate costs remaining consistent with previous quarters [36][39] Question: Residential outlook for Q4 - Residential market demand is expected to remain soft, aligning with year-to-date growth rates [65] Question: Pricing power and customer reactions to tariffs - The company has not seen pricing fatigue, and the demand environment in non-res remains strong [68] Question: Spec content evolution and new product contributions - There is an increase in electronics adoption in specs, with new product launches contributing positively [75][76]

Financial Data and Key Metrics Changes - Q3 revenue exceeded $1 billion, marking a 10.7% increase compared to 2024, with organic revenue growth of 5.9% driven by favorable pricing and volume [8][9] - Adjusted EPS for Q3 was $2.30, an increase of $0.14 or 6.5% year-over-year [9] - Year-to-date available cash flow reached $485.2 million, up 25.1% from the previous year [12][13] Business Line Data and Key Metrics Changes - Americas segment revenue was $844 million, up 7.9% reported and 6.4% organically, with non-residential business demand remaining healthy [9][10] - International segment revenue was $226 million, up 22.5% reported and 3.6% organically, with acquisitions contributing 13.6% to segment revenue [11] Market Data and Key Metrics Changes - Non-residential markets in the Americas are resilient, while residential markets remain soft, consistent with year-to-date growth rates [14][15] - International markets are expected to show roughly flat organic performance, with some segments at historical troughs [14][33] Company Strategy and Development Direction - The company is focused on capital allocation for long-term shareholder benefits, raising the 2025 adjusted EPS outlook to $8.10-$8.20 [5][15] - Allegion continues to pursue accretive acquisitions, with recent acquisitions including UAP and Bressant enhancing the product portfolio [6][7] Management's Comments on Operating Environment and Future Outlook - Management noted that spec activity has accelerated in 2025, supporting organic growth in non-residential markets [22][14] - The input cost environment remains dynamic, with expectations to drive pricing to offset inflation [15][68] Other Important Information - The company remains disciplined in capital deployment, with a strong balance sheet and a net debt to adjusted EBITDA ratio of 1.8x [12][13] - Allegion continues to be a dividend-paying stock, distributing $0.51 per share in Q3 [7] Q&A Session Summary Question: Update on spec writing and key verticals - Spec activity has continued to grow in 2025, with versatile spec writers capable of addressing various market needs [22] Question: M&A pipeline and potential earnings accretion - The M&A pipeline remains strong across both reporting segments, with ongoing activity in portfolio expansion and complementary software [24] Question: Conversations with building owners regarding macro uncertainty - Non-res project activity is healthy, with private finance returning to the market, supported by positive customer backlogs [31] Question: International volume growth and momentum - International segment showed volume growth after previous declines, with electronics businesses performing well [33] Question: Adjusted operating margins and corporate costs - Expectation of margin expansion in Q4, with corporate costs remaining consistent with previous quarters [36] Question: Pricing power and customer weakness - No signs of pricing fatigue observed, with the demand environment in non-res being healthy [68]

Financial Data and Key Metrics Changes - Q1 2025 revenue was $941.9 million, an increase of 5.4% compared to Q1 2024 [16] - Organic revenue increased by 4%, driven by favorable pricing and volume, particularly in the non-residential business in The Americas [17] - Adjusted earnings per share (EPS) for Q1 was $1.86, up $0.31 or 20% year-over-year [18] - Available cash flow was $83.4 million, up nearly 250% compared to the previous year [20] Business Line Data and Key Metrics Changes - The Americas segment reported revenue of $757.8 million, up 6.8% on a reported basis and 4.9% organically [21] - The non-residential business in The Americas saw high single-digit organic growth, while the residential business declined mid-single digits [23][24] - International segment revenue was $104.1 million, down 0.3% on a reported basis but up 0.9% organically [26] Market Data and Key Metrics Changes - The Americas experienced mid-single-digit growth and solid margin expansion, indicating strong demand and effective channel partnerships [7] - The residential market remains soft due to high mortgage rates and tariff uncertainties, with expectations to continue at low levels until a significant catalyst occurs [104] Company Strategy and Development Direction - The company is focused on capital allocation for growth, including organic investments and accretive acquisitions, having closed three acquisitions in 2025 [12][14] - Allegion is committed to maintaining its dividend policy, having announced its eleventh consecutive increase at the beginning of the year [15] - The company aims to offset tariff costs through pricing actions while remaining agile in response to market conditions [33][34] Management's Comments on Operating Environment and Future Outlook - Management affirmed the 2025 full-year outlook for adjusted EPS of $7.65 to $7.85, citing resilience in non-residential markets [9][31] - The company anticipates some headwinds in Q2 due to a lag in pricing actions relative to tariff impacts [43] - Positive internal indicators in the non-residential business and a strong aftermarket contribute to confidence in the full-year guidance [125] Other Important Information - Allegion's new product launches, including smart locks, are expected to drive growth in the electronics segment [10][11] - The company has a strong balance sheet with a net debt to adjusted EBITDA ratio of 1.6 times, supporting continued capital deployment [30] Q&A Session Summary Question: Inquiry about tariffs and pricing actions - Management acknowledged a potential lag between tariff impacts and pricing actions, expecting to cover tariff costs at the operating profit and EPS level for the full year [42][44] Question: Changes in institutional verticals and CapEx priorities - Management noted that institutional verticals like healthcare and education remain resilient, with a long tail for projects funded by municipal bonds [55][56] Question: Market dynamics and project paralysis - Management indicated that while some projects may be paused due to interest rate concerns, there is optimism for future project progression as rates stabilize [120] Question: Outlook for the residential market - Management expressed that the residential market is expected to remain soft due to high mortgage rates and construction costs, with a focus on aftermarket opportunities [104][106] Question: Pricing and productivity outlook - Management confirmed expectations for price and productivity to remain neutral for the year, despite fluctuations in quarterly performance [110][111]

Financial Data and Key Metrics Changes - Q1 2025 revenue was $941.9 million, an increase of 5.4% compared to Q1 2024 [16] - Organic revenue increased by 4%, driven by favorable pricing and volume, particularly in the non-residential business in The Americas [17] - Adjusted earnings per share (EPS) for Q1 was $1.86, up $0.31 or 20% year-over-year [18] - Available cash flow was $83.4 million, up nearly 250% compared to the previous year [20] Business Line Data and Key Metrics Changes - The Americas segment reported revenue of $757.8 million, up 6.8% on a reported basis and 4.9% organically [21] - The non-residential business in The Americas saw high single-digit organic growth, while the residential business declined mid-single digits [23][24] - International segment revenue was $104.1 million, down 0.3% on a reported basis but up 0.9% organically [26] Market Data and Key Metrics Changes - The Americas experienced mid-single-digit growth in the non-residential sector, indicating strong demand [7] - The residential market is expected to remain soft due to high mortgage rates and construction costs [104] - The company anticipates tariff costs of approximately $80 million in 2025, which they expect to offset through pricing actions [33] Company Strategy and Development Direction - The company is focused on capital allocation for organic growth and has made three bolt-on acquisitions in 2025 to enhance its portfolio [12][13] - Allegion is committed to returning capital to shareholders while investing in growth opportunities [8] - The company is maintaining its full-year outlook for adjusted EPS of $7.65 to $7.85 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the non-residential markets, particularly in institutional verticals [31] - The company remains agile in response to changing market conditions and is closely monitoring tariff impacts [46][47] - Positive internal indicators in the non-residential business provide confidence for the full-year guidance [125] Other Important Information - Allegion announced its eleventh consecutive dividend increase, amounting to approximately $44 million in Q1 [15] - The company is set to release innovative products in the smart lock segment later in the year [10][11] Q&A Session Summary Question: Inquiry about tariff impacts and pricing actions - Management acknowledged a potential lag in pricing actions relative to tariff impacts, expecting to cover tariff costs at the operating profit and EPS level for the full year [42][43] Question: Changes in institutional verticals and CapEx priorities - Management noted that institutional verticals like healthcare and education remain resilient, with ongoing projects supported by strong municipal bond issuances [55][56] Question: Market share and competition in the residential market - Management indicated that the residential market is expected to remain soft, but they are focusing on innovation in electronic products to drive growth [104][106] Question: Revenue guidance and pricing actions - Management clarified that the revenue guidance does not assume any uplift from pricing actions related to tariffs, but the operating profit guidance does reflect those actions [114][115] Question: Momentum in the channel and recession concerns - Management reported positive momentum in the non-residential sector and expressed confidence in the outlook despite broader economic concerns [124][125] Question: European market outlook - Management noted optimism in the German market and highlighted strong performance in Italy, but reiterated the need to maintain the current guidance [127][129]