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- **Revenue Growth**: Q3 2025 revenue of $1.0B+ (+10.7% YoY), driven by 5.9% organic growth in Americas.
- **EPS Upgrade**: Full-year 2025 EPS raised to $8.10-$8.20, up from prior range, reflecting $600M+ M&A and strong cash flow ($485M YTD).
- **Acquisition Impact**: 2025 acquisitions (e.g., ELATEC, UAP) to contribute ~$40M annualized revenue and 2% EPS in 2026.
- **Tariff Resilience**: 100% inflation offset via pricing/productivity, with $40M Q4 tariff surcharge revenue.
- **Challenges**: Residential market remains soft, but electronics growth (+15.5% YoY) and new products (Arrive lock) mitigate weakness.

**【CEO Summary Section】**
- Q3 2025 revenue exceeded $1 billion, growing 10.7% YoY, driven by 5.9% organic growth in the Americas segment.
- Raised full-year 2025 EPS guidance to $8.10-$8.20, up from prior range, reflecting strong execution and recent acquisitions (UAP, Brisant).
- Capital allocation: $600M year-to-date on accretive M&A (e.g., ELATEC, Gatewise), with focus on electronics, mechanical, and complementary software.
- New product launches (Schlage Performance Series locks, Arrive smart lock) contributed to 15.5% YoY electronics revenue growth.
- 2026 outlook: Expect ~2% EPS contribution from 2025 acquisitions, with nonresidential Americas growth supported by spec activity (+20% YoY in 2025).

**【CFO Financial Commentary】**
- Q3 2025: 
  - Adjusted EPS: $2.30 (vs. $2.16 prior year), +6.5% YoY.
  - Americas segment: $844M revenue (+7.9% reported, +6.4% organic), 24.1% operating margin (flat YoY due to higher corporate expenses).
  - International segment: $226M revenue (+22.5% reported, +3.6% organic), 14.3% operating margin (up 70bps YoY).
  - Year-to-date cash flow: $485.2M (+25.1%), with 85-95% conversion of adjusted net income.
- Tariffs: $40M Q4 surcharge revenue expected in Americas to offset Section 232 tariffs.
- 2025 tax rate: 17-18%, stable vs. prior year.

**【Q&A Highlights】**
- **M&A Pipeline**: Strong pipeline in both Americas and International, with focus on electronics, mechanical, and software. Recent deals (UAP, Brisant) expected to add ~$40M annualized revenue.
- **Residential Market**: Soft demand persists, but new e-lock products (Arrive) drove mid-single-digit growth in Q3.
- **Tariff Management**: Pricing and productivity initiatives offset 100% of inflation in Q3, with ~$2.2M net tailwind.
- **Spec Activity**: Nonres spec writing up 20% YoY, driven by multifamily, data centers, and healthcare projects.
- **2026 Outlook**: Expect similar market conditions to 2025, with ~2% EPS contribution from 2025 acquisitions and 35% incremental margin on organic growth.

Allegion plc (ALLE) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ALLE

ALLE fundamentals

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