Financial Data and Key Metrics Changes - Q2 revenue exceeded $1,000,000,000 for the first time, marking a 5.8% increase compared to 2024 [5][15] - Organic revenue grew by 3.2%, driven by favorable pricing and volume, particularly in the Americas non-residential business [16][18] - Adjusted earnings per share (EPS) for Q2 was $2.04, an increase of 4.1% year-over-year [17] - Year-to-date available cash flow reached approximately $275,400,000, up 56.5% compared to the previous year [24][25] Business Line Data and Key Metrics Changes - Americas segment revenue was $821,500,000, up 6.6% reported and 4.5% organically, with high single-digit growth in non-residential business [19][20] - Residential business saw a decline of mid-single digits due to a soft market environment [20] - Electronics revenue in the Americas increased by low double digits, continuing to be a long-term growth driver [21] Market Data and Key Metrics Changes - International segment revenue was $200,500,000, up 2.9% reported but down 2.2% organically, with acquisitions contributing 1.1% to revenue [22] - Currency fluctuations positively impacted reported revenue by 4% in the international segment [23] Company Strategy and Development Direction - The company is focused on capital allocation for growth, including organic investments and strategic acquisitions [7][10] - Recent acquisitions include Trimco, Elletech, Gatewise, and Waitwhile, aimed at enhancing the electronics portfolio and expanding market reach [11][13] - The company aims to leverage its strong cash generation to return value to shareholders while pursuing accretive acquisitions [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year performance, raising the adjusted EPS outlook to $8 to $8.15 based on strong operational execution and demand in non-residential markets [6][29] - The non-residential markets, particularly institutional verticals, remain resilient, while residential markets are soft due to high interest rates [26][30] Other Important Information - The company announced the divestiture of its API business in Australia, expected to close in early August [24] - The balance sheet remains strong with a net debt to adjusted EBITDA ratio of 1.5 times [25] Q&A Session Summary Question: Activity levels in non-residential markets and tariff impacts - Management noted no evidence of pull-forward ordering due to tariffs, with project demand remaining strong [34][35] Question: Margin performance and pricing actions - Management indicated that pricing actions are expected to offset inflationary pressures, with a slight tailwind from transactional FX [37][40] Question: Market conditions and share gain - Management believes Allegion is gaining share, particularly at the expense of smaller competitors, due to better operational performance [52] Question: EPS guidance increase - The increase in EPS guidance is attributed to favorable FX impacts, strong first-half performance, and contributions from acquisitions [56][57] Question: International business outlook - The international segment is expected to remain flat, with the fourth quarter typically being the strongest [78] Question: Pricing and tariff surcharges - Management clarified that the tariff revenue is expected to be neutral at the EPS level, with surcharges adjusted to offset inflation [63][84]

Financial Performance - Revenue increased by 5.8% to $1,022.0 million in Q2 2025, compared to $965.6 million in Q2 2024[18] - Adjusted EPS increased by 4.1% to $2.04 in Q2 2025, compared to $1.96 in Q2 2024[18] - Available Cash Flow (ACF) increased significantly by 56.5% to $275.4 million YTD Q2 2025, compared to $176.0 million YTD Q2 2024[21, 44] - The company is raising FY-2025 Adjusted EPS outlook to $8.00-$8.15[10, 55] Segment Performance - Allegion Americas revenue increased by 6.6% to $821.5 million in Q2 2025, compared to $770.7 million in Q2 2024[29] - Allegion International revenue increased by 2.9% to $200.5 million in Q2 2025, compared to $194.9 million in Q2 2024[36] - Americas organic revenue growth was 4.5% in Q2 and 4.7% YTD[26] - International organic revenue declined by 2.2% in Q2 and 0.7% YTD[26] Capital Allocation and Acquisitions - The company is accelerating capital deployment[10, 55] - Approximately $44 million was allocated for dividends, equating to $0.51 per ordinary share[12] - The company spent $40 million on share repurchases in Q2 2025[13] - The company announced acquisitions with a combined purchase price of approximately $525 million (€330M purchase price (~$390M) for technology & electronics acquisitions, ~$55M for mechanical portfolio expansion, and ~$80M for complementary software & services)[16] Outlook - The company updated its FY-2025 organic revenue growth outlook to 3.5% to 4.5%[50] - The company expects approximately $40 million of surcharge revenue in the Americas related to tariff mitigation, which is neutral to EPS[49]

Key Takeaways ALLE will acquire ELATEC for $379.1 million to strengthen its global access technology capabilities. ELATEC adds RFID expertise and supports nearly 100 credential types in global markets. The deal supports ALLE's growth via acquisitions, enhancing non-residential electronics offerings.Allegion plc (ALLE) recently inked a definitive deal to acquire ELATEC, including Elatec GmbH and other group entities (ELATEC), from Summit Partners through one of its subsidiaries. The deal is valued at €330 ...