Allegion leans on strength of nonresidential portfolio in 2025

DUBLIN—Allegion’s 2025 performance was buoyed by another year of high single-digit growth in its nonresidential portfolio, as U.S. residential markets softened more than expected. 

CEO John Stone told investors on the company’s Q4 earnings call that the divergence between commercial and residential demand shaped both year-end results and early expectations for 2026. 

“(Residential) ended the year softer than we had contemplated, and honestly, resi throughout the year was a little choppy,” he said “That just caused us to at least take what we think is a very prudent assumption into 2026 that we would expect resi to be soft. Certainly, should there be an uptick in that market, we're positioned very well to capture upside there.”  

Q4 results: Revenue tops $1B, electronics grows  

Allegion reported Q4 revenue of more than $1 billion, up 9.3% from 2024. Organic revenue increased 3.3%, driven by nonresidential strength and offset by softer residential and international markets.  

The Americas segment generated $795.5 million in Q4 revenue, up 6.1% reported and 4.8% organically. Nonresidential posted high single-digit organic growth, while residential declined high single digits “as residential markets remain soft,” said CFO Michael Wagnes.  

Electronics grew low double digits in the quarter as it continues to “outpace mechanical growth” and remains a durable “long-term driver.” 

Allegion leverages people power 

Stone credited the company’s performance to “the talent and dedication of our people” as Allegion navigated inflationary pressures, executed more than $600 million in acquisitions, and expanded its mechanical, electronic and software-enabled solutions.  

“Our results underscore the strength of our brands, channel partnerships and strategy,” he said. 

Allegion’s broad institutional and commercial footprint, he added, helped offset residential weakness and provide steady project flow. 

Pricing, M&A discipline  

Wagnes said Allegion expects both price and volume growth in 2026, with more price than volume. Seasonal patterns should remain normal, he said, though Q1 carries a tough comparison due to tariff timing in early 2025. 

One analyst questioned why Allegion prioritized M&A over additional share repurchases. Stone said the company’s capital allocation priorities are consistent.  

“The priority is toward profitable growth… investing for organic growth is our top use of cash,” he said. Stone added that Allegion remains a dividend-paying company with an open repurchase authorization and will buy back shares “when that’s the right decision at the right time.”  

2026 outlook: nonresidential leads, international growth  

Stone said Allegion expects non-residential volumes in the Americas to grow at a pace similar to 2025, supported by healthy spec activity and broad end-market exposure. Internationally, Allegion expects modest organic growth led by electronics, supported by portfolio improvements and M&A. 

“We have been focused on improving portfolio quality in international through a combination of self-help and acquisitions, which we believe supports growth in markets that remain sluggish,” the CEO said.  

Innovation and capital returns 

Stone also pointed to ongoing innovation across “pioneer” brands Schlage, Von Duprin and LCN, particularly in mid-tier commercial solutions. “Allegion is built on that legacy by expanding our offerings of mid-tier commercial product lines,” he said.  

The company paid $175 million in dividends in 2025 and announced its 12th consecutive annual dividend increase, along with $80 million in share repurchases. 

“Allegion is executing at a high level while staying agile,” Stone said.