Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 23, 2026 · Beat 5 of last 7 quarters
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Allegion's strong Americas nonresidential growth, including data center demand approaching 5% of nonres business, underscores the indirect AI infrastructure buildout benefit. The company's early involvement in data center specifications and its Krieger Specialty Products acquisition position it to capture future aftermarket opportunities as the installed base grows.
Allegion delivered strong Q2 results with revenue of $1.2 billion, up 12.7% reported, and organic growth of 6.9%. Americas led with 8.9% organic growth, driven by strong nonresidential and residential demand, while International declined 1.2% organically due to weak European markets. Adjusted operating margin expanded 50 bps to 24.2%, and adjusted EPS rose 17.6% to $2.40. The company repurchased $120 million of shares and paid $47 million in dividends during the quarter.
Management raised full-year reported revenue growth to 7.5%-8.5% and organic revenue growth to 3.5%-4.5%, reflecting stronger Americas demand partially offset by weaker international. Adjusted EPS guidance was raised to $8.85-$9.00, implying high single-digit to low double-digit EPS growth. Americas organic growth is expected at the higher end of mid-single digits, with pricing actions to cover inflation and continued margin expansion in the second half. International is expected to see low single-digit organic decline, with margin improvement from ERP catch-up and restructuring actions. The outlook excludes potential IEEPA refunds and future share repurchases.
“The quarter itself was as strong as I can remember in some time.”
on Americas demand
“That strength, that momentum has continued through second quarter. It's as strong as I've seen since I joined the company.”
on Spec activity
“The macro backdrop in Germany has just been worsening. And so that does have an outsized impact on us.”
on International weakness
What was better relative to expectations in Americas volumes, and what is the expectation for Americas volume in the second half?
Q2 was very strong across res and nonres, with resi stronger than expected, driven by electronics. A price increase at the end of May caused some pull-forward, but underlying demand is high single digits. The outlook assumes more modest resi growth, and Q3 last year is a tough comp.
Can you provide color on the evolution of demand in Europe, especially Germany, and the difference versus a competitor's accelerating growth?
Our European exposure is overweighted in Germany, where GDP forecasts have been sequentially downgraded. Electronics businesses are strong, but mechanical businesses in Southern Europe are only hanging in. The sequential decline in Germany has an outsized impact on us.
Can you quantify the prebuy relative to sell-through in Americas residential, and how to think about cadence in the back half?
Retail point of sale was good and inventory levels are normal, so this is not a big stocking order. Underlying demand was strong, but the outlook doesn't assume that level of performance. Q3 last year was a strong comp.