AI Takeaway
In Q2 FY2026, Allegion delivered 12.7% revenue growth to $1.15B and 15.6% basic EPS growth to $2.15, with operating margin expanding to 22.1% as pricing, volume/product mix and acquisitions more than offset higher costs and integration expenses. Source: 10-Q Item 2 MD&A, pp.17-18
Revenue
$1.15B
++12.67% YoY
EPS (Basic)
$2.15
++15.59% YoY
Operating Income
$254.7M
++15.93% YoY
Filed · Source: SEC EDGAR 10-Q filing
Allegion (ALLE) reported Q2 FY2026 revenue of $1.15B, up 12.7% year over year. Diluted EPS was $2.15.
Net revenues increased $129.5M, or 12.7%, to $1.15B in the three months ended June 30, 2026. Management attributed growth to acquisitions/divestitures (+5.1 percentage points), volume (+3.6 points), pricing (+3.3 points), and favorable currency (+0.7 points).
Source: 10-Q Item 2 MD&A, p.17
Operating income rose $35.0M to $254.7M and operating margin increased to 22.1% from 21.5%. Pricing and productivity in excess of inflation/investment spending added $14.1M, volume/product mix added $14.7M, and acquisitions/divestitures added $8.8M; these were partly offset by $1.8M of acquisition, integration and restructuring expense and a $0.8M currency headwind.
Source: 10-Q Item 2 MD&A, p.18
Allegion Americas revenue increased 11.8% to $918.6M, driven by pricing (+4.0%), volume (+4.9%) and acquisitions (+2.9%). Segment operating margin improved to 29.0% from 28.8%, while electronic-product revenue grew by a low-teens percentage; management expects continued electronic-product growth in 2026.
Source: 10-Q Item 2 MD&A, pp.20-22
Allegion International revenue rose 16.2% to $232.9M, primarily reflecting acquisitions/divestitures (+14.3%) and currency (+3.1%), while volume declined 2.0%. Segment operating income decreased $0.9M to $14.8M and margin fell to 6.4% from 7.8%, reflecting inflation and investment spending, weaker volume/product mix, and acquisition/integration/restructuring costs.
Source: 10-Q Item 2 MD&A, pp.20, 23
Six-month operating cash flow decreased $14.5M to $299.7M, primarily because higher working capital partly offset higher net earnings. Investing cash use rose to $113.2M due mainly to acquisitions, and financing cash use increased to $217.9M, primarily because of greater share repurchases and lower net debt proceeds; the company repurchased approximately 1.2M shares for $160.6M during the six months.
Source: 10-Q Item 2 MD&A, pp.17, 24
Allegion International's Q2 FY2026 revenue growth was driven principally by acquisitions/divestitures and favorable currency, while organic volume declined 2.0%. Its segment operating margin fell 1.4 percentage points to 6.4%, indicating that inflation, investment spending, volume/product mix and integration costs can pressure earnings even when reported revenue rises.
Source: 10-Q Income Statement and segment data (XBRL)
Cost of revenue increased 14.1% year over year to $634.0M, faster than revenue growth of 12.7% to $1.15B. As a result, calculated gross margin declined to 44.9% from 45.6%, creating a risk that continued input-cost or tariff-related pressure could limit profitability if not offset by pricing and productivity.
Source: 10-Q Income Statement (XBRL)
Six-month year-to-date operating cash flow declined 4.6% to $299.7M, while investing cash outflow increased 37.0% to $113.2M. This divergence indicates that working-capital demands and acquisition-related cash needs may constrain cash conversion in future periods.
Source: 10-Q Cash Flow Statement (XBRL)
Financing cash outflow increased to $217.9M year to date from $99.2M, while share buybacks rose to $120.0M from $40.0M. Long-term debt remained substantial at $2.03B, so continued capital returns alongside acquisition spending could reduce financial flexibility if operating cash flow weakens.
Source: 10-Q Balance Sheet and Cash Flow Statement (XBRL)
Reported EPS of $2.40 versus the $2.26 analyst consensus — a +6.4% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.15B | $1.02B | +12.67% |
Cost of Revenue | $634M | $555.5M | +14.13% |
Operating Income | $254.7M | $219.7M | +15.93% |
EPS (Basic) | $2.15 | $1.86 | +15.59% |
EPS (Diluted) | $2.15 | $1.85 | +16.22% |
SG&A Expense | $262.8M | $246.8M | +6.48% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $5.36B | $4.91B | +9.07% |
Current Assets | $1.5B | $1.68B | -10.59% |
Total Liabilities | $3.24B | $3.13B | +3.64% |
Current Liabilities | $777.3M | $728.5M | +6.70% |
Long-Term Debt | $2.03B | $2.07B | -1.75% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $299.7M | $314.2M | -4.61% |
Investing Cash FlowYTD | $-113.2M | $-82.6M | -37.05% |
Financing Cash FlowYTD | $-217.9M | $-99.2M | -119.66% |
Share Buybacks | $120M | $40M | +200.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 22.1% | 21.5% | +0.62% |
Current Ratio | $1.93 | — | — |
Expected release date, analyst estimates & what to watch
Allegion (ALLE) posted strong Q1 2026 revenue growth of 9.7% to $1.03B, but operating income slipped 0.6% and EPS fell 7.0% to $1.59 as SG&A costs surged 14.6% and cost of revenue rose faster than sales.
Allegion (ALLE) delivered strong FY2025 results with revenue growing 7.8% to $4.07B and net income rising 7.7% to $643.8M, driven by operating leverage and disciplined cost management that expanded operating margins to 21.1%.
Other companies in Building Products
Allegion's Q2 FY2026 revenue increased 12.7% to $1.15B from $1.02B. Management attributed the increase to acquisitions/divestitures contributing 5.1 percentage points, volume contributing 3.6 points, pricing contributing 3.3 points, and favorable currency contributing 0.7 points. Source: 10-Q Item 2 MD&A, p.17
Operating income grew 15.9% to $254.7M and diluted EPS increased 16.2% to $2.15. Operating margin expanded to 22.1% from 21.5%, although calculated gross margin declined to 44.9% from 45.6% as cost of revenue grew faster than revenue. Source: 10-Q Item 2 MD&A, pp.17-18; 10-Q Income Statement (XBRL)
The filing provides reported diluted EPS of $2.15, up from $1.85 in the prior-year quarter. It does not provide analyst consensus estimates, so whether Allegion beat or missed market expectations cannot be determined from this filing. Source: 10-Q Item 2 MD&A, p.17
Allegion International's operating margin fell to 6.4% from 7.8%, while segment operating income declined to $14.8M from $15.7M. Management cited inflation and investment spending exceeding pricing/productivity, unfavorable volume/product mix, and higher acquisition, integration and restructuring expenses, partly offset by acquisitions and currency. Source: 10-Q Item 2 MD&A, p.23
Allegion ended the period with a 1.93x current ratio, $1.50B of current assets, and $777.3M of current liabilities. Long-term debt was $2.03B, while six-month year-to-date operating cash flow was $299.7M; management stated it expected operating cash flow, cash balances and revolving-credit capacity to meet financing needs for at least the next 12 months. Source: 10-Q Balance Sheet and Cash Flow Statement (XBRL); 10-Q Item 2 MD&A, p.24