Allegion (ALLE)·Q4 2025 Earnings Summary
Allegion Q4 2025 Earnings: First Miss in 8 Quarters as Residential Softness Weighs
February 17, 2026 · by Fintool AI Agent
Allegion (NYSE: ALLE) reported Q4 2025 results that missed consensus on both the top and bottom line, snapping an 8-quarter EPS beat streak. Adjusted EPS of $1.94 fell short of the $1.98 estimate, while revenue of $1,033M came in slightly below the $1,038M consensus. The stock dropped approximately 4% in after-hours trading to $172.
FY 2025 delivered adjusted EPS of $8.14 (+8.1% YoY), landing at the high end of the company's $8.10-$8.20 guidance range raised last quarter. For 2026, management initiated adjusted EPS guidance of $8.70-$8.90, implying 7-9% growth but coming in at the lower end of street expectations.
Did Allegion Beat Earnings?
No — Allegion missed on both metrics in Q4 2025:
This breaks an impressive streak — Allegion had beaten EPS estimates for 8 consecutive quarters going back to Q4 2023.
Beat/Miss History (Last 8 Quarters):
Values retrieved from S&P Global
Ask Fintool AI AgentWhat Did Management Guide?
Allegion's FY 2026 outlook came in at the lower end of analyst expectations:
Guidance Bridge:
- Operating income contribution: $0.65-$0.85, inclusive of $0.10-$0.15 from acquisitions
- Tax rate headwind: ~$0.09 (midpoint of 18%-19% vs 17.3% in FY 2025)
- Average diluted shares: ~86.6M
FY 2026 consensus was ~$8.86 — the $8.80 midpoint of guidance is slightly below street expectations, contributing to the negative stock reaction.
Segment Outlook:
- Americas: Low-to-mid single digit organic growth; acquisitions +0.5%; FX flat
- International: Low single digit organic; acquisitions +8%; FX +3%
How Did the Stock React?
ALLE shares traded down approximately 4.2% in after-hours to $172, after closing the regular session at $179.50. This marks one of the larger post-earnings declines for the stock in recent years.
Stock data as of February 17, 2026
The stock had been trading near 52-week highs ahead of earnings, up 54% from the 52-week low, suggesting expectations were elevated heading into the print.
Ask Fintool AI AgentWhat Changed From Last Quarter?
Key Divergences from Q3 2025:
The residential business swung sharply negative — after posting mid-single digit growth in Q3 (driven by new electronic product launches), residential declined high-single digits in Q4 as product launch benefits faded and underlying market demand remained soft.
International organic growth turned negative (-2.3% vs +3.6% in Q3), with management noting markets remain "sluggish" though electronics continue to offset mechanical weakness.
Segment Performance
Americas (77% of Revenue)
- Non-Residential: Up high-single digits organically — demand remains healthy
- Residential: Down high-single digits — market softness continues
- Electronics: Low double-digit organic growth
- Price realization: +5.6%, Volume: -0.8%
International (23% of Revenue)
- Acquisitions/divestitures: +16.0% contribution
- Currency tailwind: +7.8%
- Electronics growth offsetting mechanical weakness
- Acquisitions accretive to segment margins
Full Year 2025 Summary
Capital Allocation Highlights:
- Acquisitions contributed $0.20 to EPS in FY 2025
- Available cash flow conversion: 85.7% of adjusted net income
- Net Debt / EBITDA: 1.6x (down from 2.2x gross debt)
- Dividend increased 8% in February 2026
2026 End Market Outlook
Management's early read on 2026 markets:
Americas:
- Non-residential volume growth expected similar to 2025
- Lower price contribution but still expected to cover inflation
- Broad non-residential market exposure with large installed base supports aftermarket
- Residential markets remain soft
International:
- Markets remain sluggish
- Growth led by electronics
- Acquisitions driving growth and margin expansion
- Improved portfolio quality
Key Risks and Concerns
-
Residential weakness persisting — High-single digit declines in Q4 with no near-term recovery expected
-
Tariff exposure — Company sources 20-25% of Americas COGS from Mexico (residential-focused); tariff costs estimated at ~$80M annually, offset through pricing
-
International organic contraction — Turned negative in Q4, with Germany particularly weak
-
Guidance conservatism — FY 2026 EPS midpoint below consensus may reflect management caution on macro uncertainty
Ask Fintool AI AgentQ&A Highlights
Key themes from the analyst Q&A:
On Residential Weakness (Joe O'Dea, Wells Fargo):
"Resi in the Americas ended the year softer than we had contemplated. And honestly, resi throughout the year was a little choppy... We put up mid-single digit growth in the third quarter, really largely on the heels of a very successful new product launch, and then a pretty soft Q4. I would say, yeah, 2026 has started off better, let's just say."
Management noted residential volumes were even worse than the high-single digit decline suggests, since pricing was favorable in Q4. The channel doesn't hold significant inventory, so destocking impacts are typically short-lived.
On 2026 Americas Outlook (Joe O'Dea, Wells Fargo): Both price and volume growth expected, but more pricing than volume for the year. Seasonally, Q1 revenue is similar to Q4, with the middle two quarters being the largest. Q1 2025 didn't yet have the tariff-driven inflation or pricing, making it a tough year-over-year comp.
On Margin Drivers (Tomohiko Sano, JPMorgan): For 2026, management expects pricing and productivity to exceed inflation and investment on a dollar basis, and margin rates should not be a headwind for the full year (unlike 2025). Q1 faces a tough comparable due to the carryover of the quarter before tariff inflation hit.
On Pricing Dynamics (Brett Linzey, Mizuho):
"Our industry does do... a combination of some surcharges, mostly list price increases. We expect 2026 to be more list price price increases... our going-in assumption is that inflation will be a little less than what you saw in 2025, so therefore we'll get a little less pricing in total."
On M&A Pipeline (Robert Schultz, Baird):
"Pipeline is very active, I would say, in both our international and our Americas segments, and largely in line with the strategic overlay we shared with you at Investor Day last May... you can still count on us to be quite disciplined and making sure we're sticking very close to our strategy."
On Capital Allocation (Andrew O'Brien, Bank of America): CEO John Stone emphasized that profitable growth remains the top priority, with dividends expected to grow commensurate with earnings. The company maintains an open share repurchase authorization but prioritizes acquisitions when attractive bolt-on targets are available.
On Interflex Business (Andrew O'Brien, Bank of America):
"I'm so proud of our Interflex team... Blue chip customer base, we've put in resources to grow the Interflex and the plano solutions across Europe. Doing very well. They had a bang-up year. They're really delighting their customers. We're finding ways to get AI into the software offerings, just to help our customers get all the reports and the data that they need."
On Americas Q4 Margins (Chris Snyder, Morgan Stanley): The Q4 margin decline was driven by the ~15-point swing in residential volumes between Q3 (+mid-single digits) and Q4 (down high-single digits). Once past Q1 2026's tough comp, core incrementals remain sound and consistent with Investor Day targets.
What to Watch
- Q1 2026 residential trends — Management noted 2026 "has started off better" for residential ; watch for stabilization
- Tariff developments — Mexico tariff policy and pricing pass-through effectiveness
- M&A pipeline — Pipeline "very active" in both Americas and International; ~2 points of acquisition carryover expected in 2026
- Electronics adoption — Continues to be a secular growth driver; double-digit growth sustained
Company Overview
Allegion (NYSE: ALLE) is a global pioneer in seamless access, designing and manufacturing security products including locks, door closers, exit devices, access control systems, and workforce productivity solutions. The company's leading brands include Schlage, Von Duprin, LCN, CISA, Interflex, and SimonsVoss. Allegion had $4.1B in revenue in 2025 and serves both residential and non-residential markets primarily in the Americas and internationally.
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