ALLE · Allegion plc

Allegion's first-quarter 2026 results showed solid top-line growth, with reported revenues increasing 9.7% to $1,033.6 million, driven by a 4.8% net contribution from acquisitions and a 2.3% foreign currency tailwind. Organic revenue grew 2.6%, led by the Americas region, where non-residential business posted mid-single-digit organic growth on price realization, while residential was flat. The International segment saw organic revenue decline 5.3% due to ERP implementation disruptions in a legacy mechanical business, though management expects recovery over the remainder of 2026. Despite revenue growth, profitability contracted: GAAP operating margin fell 200 basis points to 18.9%, and adjusted operating margin declined 150 basis points to 21.2%. The margin compression was attributed to volume declines, unfavorable mix, and headwinds from price and productivity net of inflation and investment (PPII), including transactional foreign currency. Adjusted EPS of $1.80 decreased 3.2% year-over-year, reflecting lower operating margins and a higher adjusted effective tax rate (20.1% vs. 16.1%). Management commentary highlighted strong performance in Americas non-residential and electronics businesses, and the company's agile cost management. Looking forward, Allegion raised its full-year 2026 reported revenue growth guidance to 6%-8% (from prior) to include the DCI acquisition, while affirming organic growth of 2%-4% and adjusted EPS of $8.70-$8.90. The board authorized a $500 million share repurchase program, signaling confidence in cash generation. The company ended the quarter with $308.9 million in cash and $2,030.7 million in total debt.