Allegion plc delivered a solid QQ2 2025 performance, leveraging a diversified product portfolio in mechanical and electronic security to generate healthy profitability and robust cash flow. Revenue totaled $1.022 billion, up 5.84% year over year and 8.50% quarter over quarter, supported by steady demand across commercial, institutional, and residential end-markets. Gross margin remained strong at 45.6%, underpinning an operating margin of 21.5% and a net margin of 15.6%. EBITDA reached $256.9 million, with EBITDA margin at 25.1%, reflecting a favorable mix and disciplined cost management. Net income was $159.7 million, translating to diluted EPS of $1.85–$1.86.
Strategically, Allegion generated robust free cash flow of approximately $192 million in the quarter, underscoring the company’s ability to convert earnings into liquidity while funding capital expenditures and shareholder-friendly activity. Operating cash flow was about $209.7 million, supported by a minimal capital outlay ($17.7 million) and ongoing working capital dynamics that contributed to a positive cash conversion cycle of roughly 75.5 days. The balance sheet remains solid with cash and equivalents of about $656.8 million, total assets near $4.91 billion, and net debt around $1.41 billion, yielding a debt-to-capitalization profile around 55.5% and a debt-to-equity ratio of ~1.25. Management commentary (where available) emphasized continued execution on price realization, cost discipline, and portfolio optimization to sustain margins in a potentially softer macro environment.
Overall, the QQ2 2025 print reinforces Allegion’s position as a durable player in the Construction Materials space, delivering earnings quality, consistent cash generation, and a balance sheet positioned to weather cyclicality while supporting strategic investments and shareholder returns.