Allegion’s first quarter results were met with a positive response from the market, reflecting management’s emphasis on nonresidential demand in The Americas and continued margin expansion. CEO John Stone credited growth to strong execution, particularly in the nonresidential segment, and highlighted the role of the company’s distribution channel partners. Stone noted, “This was another demonstration of the resilience of our business model as we expanded our industry-leading margins and continued to invest in our business.” The quarter also benefited from favorable pricing, volume leverage, and contributions from recent acquisitions.
Is now the time to buy ALLE? Find out in our full research report (it’s free).
Allegion (ALLE) Q1 CY2025 Highlights:
- Revenue: $941.9 million vs analyst estimates of $923.1 million (5.4% year-on-year growth, 2% beat)
- Adjusted EPS: $1.86 vs analyst estimates of $1.67 (11.2% beat)
- Adjusted EBITDA: $228 million vs analyst estimates of $215.6 million (24.2% margin, 5.8% beat)
- Management reiterated its full-year Adjusted EPS guidance of $7.75 at the midpoint
- Operating Margin: 20.9%, up from 19.3% in the same quarter last year
- Organic Revenue rose 4% year on year (-3.6% in the same quarter last year)
- Market Capitalization: $11.77 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Allegion’s Q1 Earnings Call
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Joe Ritchie (Goldman Sachs) focused on the timing mismatch between tariffs and price increases. CFO Mike Wagnes clarified that there could be a short-term lag in the second quarter but expects tariffs to be fully offset for the year.
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Timothy Wojs (Baird) asked about supply chain positioning relative to peers. CEO John Stone explained that Allegion has been reducing China exposure by investing in Mexican production, making its supply chain less vulnerable to tariffs compared to import-heavy competitors.
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Jeffrey Sprague (Vertical Research) questioned whether tariff-related price increases could weigh on margins even if operating profit is protected. Wagnes confirmed the approach offsets dollar costs, potentially resulting in lower margin rates, especially if tariffs rise further.
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Julian Mitchell (Barclays) inquired about residential replacement demand and market share potential. Stone indicated that residential demand remains weak due to high mortgage rates, and while importers face headwinds, it's too early to determine market share gains.
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Christopher Snyder (Morgan Stanley) asked if project delays or “paralysis” from pricing uncertainty could affect volumes. Stone acknowledged that higher interest rates have led to some project pauses, but a backlog of designed projects could support future growth if financing conditions improve.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be closely monitoring (1) how efficiently Allegion executes additional price surcharges to offset evolving tariffs, (2) the sustainability of nonresidential demand, particularly in institutional and aftermarket channels, and (3) progress on integrating recent acquisitions and scaling electronic product launches. Updates on residential demand trends and any shifts in supply chain dynamics will also be important indicators of performance.
Allegion currently trades at $138.16, up from $126.55 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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