Q3 FY2026
Filed Oct 22, 2026Allegion Reports Q3-2026 Financial Results High-Single Digit Revenue Growth, Strength in Americas Non-Residential; Raising Full-Year 2026 Outlook
Third-quarter reported revenue grew 9.6%, organic revenue grew 7.2%, adjusted EPS grew 13.0%, adjusted operating margin expanded to 24.7%, and the company raised its full-year reported revenue growth, organic growth and adjusted EPS outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net revenuesGAAP | $1.17B | – | 9.6% |
| Q3 2026 organic revenue growthnon-GAAP | 7.2% | – | – |
| Q3 2026 cost of goods soldGAAP | $624.4M | – | – |
| Q3 2026 gross profitGAAP | $548.2M | – | – |
| Q3 2026 selling and administrative expensesGAAP | $263.6M | – | – |
| Q3 2026 operating incomeGAAP | $284.6M | – | 21.7% |
| Q3 2026 operating marginGAAP | 24.3% | – | – |
| Q3 2026 adjusted operating incomenon-GAAP | $289.7M | – | 12.5% |
| Q3 2026 adjusted operating marginnon-GAAP | 24.7% | – | – |
| Q3 2026 interest expenseGAAP | $24.2M | – | decrease of $2.4 million |
| Q3 2026 other income, netGAAP | $7.4M | – | – |
| Q3 2026 earnings before income taxesGAAP | $267.8M | – | – |
| Q3 2026 provision for income taxesGAAP | $46.9M | – | – |
| Q3 2026 effective income tax rateGAAP | 17.5% | – | – |
| Q3 2026 adjusted effective income tax ratenon-GAAP | 17.5% | – | – |
| Q3 2026 net earningsGAAP | $220.9M | – | – |
| Q3 2026 adjusted net earningsnon-GAAP | $221M | – | – |
| Q3 2026 basic earnings per ordinary shareGAAP | $2.60 | – | – |
| Q3 2026 diluted earnings per ordinary shareGAAP | $2.59 | – | 18.8% |
| Q3 2026 adjusted diluted earnings per ordinary sharenon-GAAP | $2.60 | – | 13.0% |
| Q3 2026 shares outstanding - basicGAAP | 84.8 | – | – |
| Q3 2026 shares outstanding - dilutedGAAP | 85.2 | – | – |
| Q3 2026 adjusted EBITDAnon-GAAP | $308M | – | – |
| Nine months ended September 30, 2026 net revenuesGAAP | $3.36B | – | 10.7% |
| Nine months ended September 30, 2026 organic revenue growthnon-GAAP | 5.7% | – | – |
| Nine months ended September 30, 2026 gross profitGAAP | $1.52B | – | – |
| Nine months ended September 30, 2026 operating incomeGAAP | $734.6M | – | – |
| Nine months ended September 30, 2026 operating marginGAAP | 21.9% | – | – |
| Nine months ended September 30, 2026 adjusted operating incomenon-GAAP | $787.4M | – | – |
| Nine months ended September 30, 2026 adjusted operating marginnon-GAAP | 23.5% | – | – |
| Nine months ended September 30, 2026 net earningsGAAP | $543.6M | – | – |
| Nine months ended September 30, 2026 adjusted net earningsnon-GAAP | $583M | – | – |
| Nine months ended September 30, 2026 diluted earnings per ordinary shareGAAP | $6.33 | – | – |
| Nine months ended September 30, 2026 adjusted diluted earnings per ordinary sharenon-GAAP | $6.79 | – | – |
| Nine months ended September 30, 2026 adjusted EBITDAnon-GAAP | $841.4M | – | – |
| Nine months ended September 30, 2026 net cash provided by operating activitiesGAAP | $604M | – | – |
| Nine months ended September 30, 2026 capital expendituresGAAP | $64.6M | – | – |
| Nine months ended September 30, 2026 available cash flownon-GAAP | $539.4M | – | increase of $54.2 million |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Allegion Americas Q3 2026Organic revenue was up 9.1%. Non-residential business was up low-double digits organically, driven by volume growth and price realization. Residential business was up mid-single digits organically, driven by price realization. | $942.4M | – | 11.7% |
| Allegion International Q3 2026Organic revenue was down 0.2% as volume declines more than offset favorable pricing. | $230.2M | – | 1.8% |
| Allegion Americas nine months ended September 30, 2026Organic growth was 7.6%. | $2.67B | – | 10.2% |
| Allegion International nine months ended September 30, 2026Organic growth was (2.1)%. | $686.8M | – | 12.4% |
Full-year 2026 outlook
- Revenuereported revenue growth of 9.5% to 10.5%; organic growth of 5.0% to 6.0%
- Tax rateadjusted effective tax rate of approximately 18% to 19%
- Noteadjusted EPS of $9.05 to $9.10
- Notereported EPS of $8.35 to $8.40
- Noteestimated impacts of approximately $0.60 per share for acquisition-related amortization, $0.28 per share for restructuring, M&A and other adjustments as well as $0.18 per share benefit for tariff refunds
- Noteaverage diluted share count of approximately 85.6 million shares
- Noteavailable cash flow to be 85% to 95% of adjusted net income
Capital returns
- In the third quarter of 2026, the company repurchased approximately 0.8 million shares for approximately $120 million.
- In the third quarter of 2026, the company paid quarterly dividends of $0.55 per ordinary share or approximately $46 million.
- Nine months ended September 30, 2026 dividends paid to ordinary shareholders were $140.2 million, compared with $131.4 million.
- Nine months ended September 30, 2026 repurchase of ordinary shares was $280.3 million, compared with $80.0 million.
What drove it
- Third-quarter organic revenue growth was driven by volume growth and price realization.
- Reported revenue reflected a 2.6% net positive impact from acquisitions and divestitures and a 0.2% headwind from foreign currency.
- Adjusted operating margin expansion was attributed to favorable volume leverage and price and productivity net of inflation and investment, inclusive of transactional foreign currency.
- Third-quarter IEEPA tariff refunds benefited operating income by $19.9 million and interest income by $0.9 million; these benefits were excluded from adjusted operating income and adjusted EPS.
- Americas adjusted operating margin increased 20 basis points to 30.1%.
- International adjusted operating margin decreased 40 basis points to 13.9%.
Concerns
- International organic revenue was down 0.2%, with volume declines more than offsetting favorable pricing.
- International adjusted operating margin decreased 40 basis points to 13.9%, driven by volume declines and unfavorable mix, partly offset by a PPII tailwind and favorable impacts from acquisitions.
- Americas acquisitions were a 40-basis point headwind to margin rate.
- The reported quarter included $19.9 million of tariff refunds in operating income and $0.9 million of related interest income, while adjusted results excluded these benefits.
What to watch
- Execution against full-year reported revenue growth outlook of 9.5% to 10.5% and organic growth outlook of 5.0% to 6.0%.
- Americas non-residential volume growth and price realization.
- Whether International volume declines and unfavorable mix persist.
- Delivery against adjusted EPS outlook of $9.05 to $9.10 and reported EPS outlook of $8.35 to $8.40.
- Available cash flow conversion, guided to 85% to 95% of adjusted net income.
Balance sheet and cash flow
- Cash and cash equivalents were $388.1 million at September 30, 2026, compared with $356.2 million at December 31, 2025.
- Total debt was $2,032.0 million at the end of third-quarter 2026.
- Long-term debt was $2,031.7 million at September 30, 2026, compared with $1,979.9 million at December 31, 2025.
- Nine-month net cash used in investing activities was $178.2 million, compared with $649.3 million.
- Nine-month acquisition of businesses, net of cash acquired was $74.7 million, compared with $594.0 million.
- Nine-month net cash used in financing activities was $388.0 million, compared with $115.2 million.
- Cash and cash equivalents at the end of the nine-month period were $388.1 million, compared with $302.7 million.
Analysis
Allegion delivered $1,172.6 million of third-quarter net revenues, up 9.6%, with organic revenue growth of 7.2%. Growth was led by the Americas segment, where revenue increased 11.7% and organic growth was 9.1%. Management attributed Americas performance to low-double-digit organic growth in non-residential and mid-single-digit organic growth in residential. The International segment grew 1.8% on a reported basis, but organic revenue declined 0.2% as volume declines outweighed favorable pricing.
Profitability improved on both reported and adjusted measures. GAAP operating income increased 21.7% to $284.6 million, while adjusted operating income increased 12.5% to $289.7 million. GAAP operating margin rose to 24.3% from 21.8%, and adjusted operating margin rose to 24.7% from 24.1%. The company cited favorable volume leverage and price and productivity net of inflation and investment. Americas adjusted operating margin reached 30.1%, while International adjusted operating margin fell to 13.9% because of volume declines and unfavorable mix.
GAAP diluted EPS was $2.59, up 18.8%, and adjusted diluted EPS was $2.60, up 13.0%. Reported earnings included $19.9 million of IEEPA tariff refunds in operating income and $0.9 million of related interest income, which were excluded from adjusted operating income and adjusted EPS. The effective tax rate was 17.5%, compared with 9.8%, while the adjusted effective tax rate was 17.5%, compared with 14.9%.
Cash generation and capital returns remained substantial through the first nine months. Available cash flow was $539.4 million, an increase of $54.2 million versus the prior-year period. The company ended the quarter with $388.1 million of cash and cash equivalents and $2,032.0 million of total debt. During the quarter, Allegion repurchased approximately 0.8 million shares for approximately $120 million and paid quarterly dividends of $0.55 per ordinary share, or approximately $46 million.
The company raised full-year 2026 outlook for reported revenue growth to 9.5% to 10.5%, organic growth to 5.0% to 6.0%, and adjusted EPS to $9.05 to $9.10. It updated reported EPS outlook to $8.35 to $8.40 and continued to expect available cash flow of 85% to 95% of adjusted net income. The central operating issue for the remainder of the year is whether continued Americas non-residential momentum can offset the International segment's organic volume pressure and margin contraction.
Management, verbatim
I am pleased with our Q3 performance as we delivered high-single digit organic revenue growth and low teens adjusted EPS growth led by our Americas non-residential business. With steady momentum in our demand generation engine and a proven, resilient business model, we are raising our full-year 2026 revenue and adjusted EPS outlook.
John H. Stone, Allegion President and CEO
Not in the filing
stated, not guessed- Prior-quarter comparisons were not reported for the quarterly operating metrics.
- Q3 2026 operating cash flow, capital expenditures and available cash flow were not reported as standalone quarterly figures.
- Gross margin percentages were not reported.
- Prior full-year guidance was not provided, so no comparison of actual results with prior guidance is available.
- Forward guidance for gross margin and operating expenses was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.