ALLE 10-K & 10-Q changes, risk factors and insider trading

Our businesses operate around the world in various geographic regions and product markets. Additionally, we procure various product s,products, parts, components and services from supplier partners located throughout the world. Our global operations depend on products manufactured, purchased and sold in the U.S. and internationally, including in Australia, Canada, China, Europe, Mexico, New Zealand and the Middle East. The political, economic and regulatory environments in which we operate are becoming increasingly volatile and uncertain. Accordingly, we are subject to multiple risks that are inherent in operating and sourcing globally, including:

As an example, in FebruaryThroughout 2025, the U.S. government announced tariffs on imports from Canada, Mexico and China,several countries from which we manufacture and/or exportimport products and components. Subsequently,In the2025, we have offset inflation due to tariffs onwith Canadapricing and Mexico were paused. We are evaluating the potential impact of these actions and considering what, if any, steps we take to mitigate the impact of the tariffs.actions. We estimate we source approximately 20-25% of Cost of goods sold from Mexico and less than 5% of Cost of goods sold from China. The degree to which any new or increased tariffs would impact our business and results of operations is largely dependent on factors outside of our control, including if the tariffs are ultimately implemented, the timing, duration and magnitude of their implementation, and responses or retaliatory actions taken by other countries or regions. We can give no assurance that the impact of any tariffs will not have a material adverse effect upon our results of operations, financial condition or liquidity or that actions we may take to mitigate the impact of the tariffs will be effective.

We had approximately $2$2.0 billion of outstanding indebtedness at December 31, 2024.2025. In addition, weWe have a senior unsecured revolving credit facility (the "Revolving Facility") that permits borrowings of up to $750$1.0 million.billion. A portion of our cash flows from operations is dedicated to servicing our indebtedness and will not be available for other purposes, including our operations, capital expenditures, payment of dividends, share repurchases or future business opportunities or other strategic investments.

At December 31, 2024,2025, ourwe borrowingshad included$190.6 amillion variableoutstanding rate term loan facility (the "Term Facility", and together withon the Revolving Facility, the "Credit Facilities"). The Credit Facilities had a combined outstanding variable rate balance of $212.5 million at December 31, 2024, which exposes us to variable interest rate risk. We are also exposed to the risk of continued rising interest rates to the extent we fund our short or long-term financing needs with variable-rate borrowings under the Revolving Facility. If variable base rates under the CreditRevolving Facilities continue toFacility increase in the future, our Interest expense could increase as well. For more details about our interest rate exposure under the CreditRevolving Facilities,Facility, please see Part II. Item 7A.

We must develop and commercialize new products and services that meet the varied and evolving needs of our customers and end-users in order to remain competitive in our current and future markets and in order to continue to grow our business. EndEnd- users are continually adopting more advanced technologies in their facilities and homes, accelerated by the increasing adoption of IoT technologies and connected devices, which will require us to devote significant effort and resources to the development, maintenance and enhancement of our IT Systems (as defined below) and other infrastructure required to support and/or enhance the functionality of our electronic products and solutions. The speed of development by our competitors and new market entrants is increasing. We cannot provide any assurance that any new product or service will be successfully commercialized in a timely manner, if ever, or, if commercialized, will result in returns greater than our investment. Investment in a product or service could divert our attention and resources from other projects that become more commercially viable in the market. We also cannot provide any assurance that any new product or service will be accepted by the market.

We may pursue business opportunities that diverge from our core business, including expanding our products or service offerings, seeking to expand our products and services into new international markets, investing in new and unproven technologies and forming new alliances with companies to develop and distribute our products and services. We can offer no assurance that any such business opportunities will prove successful. Certain international markets may be slower than our established markets in adopting our services and products, and our operations in such markets may not develop at a rate that supports our level of investment. Among other negative effects, our investment in new business opportunities may exceed the returns we realize. New investments could have higher cost structures than our current business, which could reduce operating margins and require more working capital. In the event that working capital requirements exceed operating cash flow, we may be required to draw on the Revolving Facility or pursue other external financing, which may not be readily available. Additionally, our pursuit of new business opportunities that diverge from our core business may expose us to different risks and uncertainties other than those described in this “Risk Factors” section or elsewhere in this Annual Report on Form 10-K. In addition to the risks outlined above, expansion into certain new markets may require us to compete with local businesses with greater knowledge of the market, including the tastes and preferences of end-users, and higher market shares.

We utilize a number of tools to improve efficiency and productivity. Implementation of new processes to our operations could cause disruptions and may prove to be more difficult, costly or time consumingtime-consuming than expected. Additionally, from time to time, we undertake substantial capital projects for varying reasons, such as to increase production capacity or to insource certain products, parts or components. We invest in areas we believe best align with our business strategies and that will optimize future returns. However, there can be no assurance that all our planned enterprise excellence projects or other capital expenditures will be fully implemented, or if implemented, will realize the expected improvements or financial returns.

We have, from time to time, restructured or made other adjustments to our workforce and manufacturing footprint, and may need to do so in the future, in response to market or product changes, performance issues, changes in strategy, acquisitions and/or other internal or external considerations. These restructuring activities and other organizational changes often result in increased restructuring costs, diversion of management’s time and attention from daily operations, cybersecurity and other operational risks and temporarily reduced productivity. If we are unable to successfully manage and implement restructuring and other organizational changes, we may not achieve or sustain the expected growth or cost savings benefits of these activities or do so within the expected timeframe. These effects could recur in connection with future acquisitions and other organizational changeschanges, and our results of operations could be negatively affected.

Global health crisescrises, or outbreak and spread of a communicable disease or virus in the countries where we operate or sell products and provide services, could adversely affect our operations and financial performance. Further, any national, state or local government mandates or other orders taken to minimize the spread of a global health crisis could restrict our ability to conduct business as usual, as well as the business activities of our key customers and suppliers, including the potential for labor shortages. In particular, the ultimate extent of the impact of any epidemic, pandemic or other global health crisis on our business, financial condition and results of operations will depend on future developments which are highly uncertain and cannot be predicted.

We may be subject to risks relating to systems failures or disruptions to our information technology and operational technology systems.

We rely extensively on information technology and operational technology systems, networks and services including hardware, software, firmware and technological applications and platforms (collectively, "IT Systems") to manage and operate our business from end-to-end, including ordering and managing materials from suppliers, design and development, manufacturing, marketing, selling and shipping to customers, invoicing and billing, managing our banking and cash liquidity systems, managing our enterprise resource planning and other accounting and financial systems and complying with regulatory, legal and tax requirements. There can be no assurance that our current IT Systems will function properly. We have invested and will continue to invest in improving our IT Systems. Some of these investments are significant and impact many important operational processes and procedures. There is no assurance that newly implemented IT Systems will improve our current systems, improve our operations or yield the expected returns on the investments. In addition, the implementation of new IT Systems may be more difficult, costly or time consumingtime-consuming than expected and cause disruptions in our operations and, if not properly implemented and maintained, negatively impact our business. If our IT Systems cease to function properly or if these systems do not provide the anticipated benefits, our ability to manage our operations could be impaired.

Our reputation and the reputation of our brands, including the perception held by our customers, end-users, business partners, investors, other key stakeholders and the communities in which we do businessbusiness, are influenced by various factors. There is an increased focus from our stakeholders, as well as regulatory authorities both within the U.S. and internationally, on ESG practices and disclosure. If we fail, or are perceived to have failed, in any number of ESG matters, such as environmental stewardship, good corporate governance, workplace conduct and support for local communities, or to effec tivelyeffectively respond to changes in, or new, legal, regulatory or reporting requirements concerning climate change or other sustainability concerns, we may be subject to regulatory fines and penalties, and our reputation or the reputation of our brands may suffer. Further, we have made several public commitments regarding our intended reduction of carbon emissions, including a commitment to achieve carbon neutral emissions by 2050.emissions. Although we intend to meet these commitments, we may be required to expend significant resources to do so, which could increase our operational costs. Further, there can be no assurance of the extent to which any of our commitments will be achieved, or that any future investments we make to achieve such commitments will meet investor, legal and/or any other regulatory expectations and requirements. Moreover, we may determine that it is in the best interest of our Company and our stockholders to prioritize other business, social, governance or sustainable investments over the achievement of our current commitments based on economic, technological developments, regulatory and social factors, business strategy or pressure from investors, activist groups or other stakeholders. If we are unable to meet our commitments, we could incur adverse publicity and reaction from investors, advocacy groups or other stakeholders, which could adversely impact our reputation and brand perception. Such damage to our reputation and the reputation of our brands may negatively impact our business, demand for our products and services, our financial condition and results of operations.

Our operations are subject to regulatory risks.risks related to domestic and international, environmental, health and safety laws.

Our Memorandum and Articles of Association containscontain provisions to deter takeover practices, inadequate takeover bids and unsolicited offers. These provisions include, amongst others:

We are a leading global provider of security products and solutions operating in two segments: Allegion Americas and Allegion International. We sell a wide range of security products and solutions for end-users in commercial, institutional and residential facilities worldwide, including the education, healthcare, government, hospitality, retail, commercial office and single and multi-family residential markets. Our leading brands include CISA,CISA®, Interflex,Interflex®, LCN,LCN®, Schlage,Schlage®, SimonsVoss® and Von Duprin.Duprin®.

Business and Industry Trends and Outlook and Global Trade and Macroeconomic Environment

In FebruaryThroughout 2025, the USU.S. government announced tariffs on imports from Mexico, Canada and China,several countries from which we manufacture and/or import products and components. Subsequently,In the2025, we offset inflation due to tariffs onwith importspricing from Mexico and Canada were paused.actions. We arecontinue evaluatingto analyze the potential impact of thesechanges actionsin tariffs and considering what, if any, steps, including pricing actions, we may take to mitigate the impact of the tariffs. We estimate we source approximately 20-25% of cost of goods sold ("COGS") from Mexico, less than 5% of COGS from China, and 5-10% of COGS from all other non-US countries. Additionally, this could impact future demand.

The increase in Net revenues was driven by improved pricingpricing, and thefavorable impact from acquisitions made/ duringdivestitures, the year. These increases were partially offset by lowerhigher volumes and unfavo rablefavorable foreign currency exchange rate movements.

Pricing and productivity in excess of inflation and investment spending includes the impact to CostsCost of goods sold from pricing, as defined above, in addition to productivity, inflation and investment spending. Productivity represents improvements in unit costs of materials and cost reductions related to improvements to our manufacturing design and processes. Inflation includes unit costs for the current period compared to the average actual cost for the prior period, multiplied by current year volumes. Expenses related to increased head count for strategic initiatives, new facilities or other significant spending for strategic initiatives or new product and channel development, are captured in investment spending. Volume/product mix represents the impact due to increases or decreases of revenue due to changes in unit volume, including new products and services, including the effect of changes in the mix of products and services sold on Cost of goods sold.

For the year ended December 31, 2024,2025, Selling and administrative expenses as a percentage of Net revenues decreasedincreased to 23.5%24.1% from 23.7%,23.5%, as compared to the year ended December 31, 2023,2024, due to the following:

Selling and administrative expenses as a percentage of Net revenues decreasedincreased due to a year-over-year decrease in restructuring, integration, and acquisition expenses and the beneficial impacts from current and prior year acquisition activity. These decreases were partially offset by inflation in excess of productivity and investment spending,spending asand wella asyear-over-year increase in restructuring, integration, and acquisition expenses. These increases were partially offset by the unfavorablefavorable impact of lowerhigher volumes.volume leverage.

The increase in Operating marginincome was driven by favorable volume/product mix, the favorable impact from acquisitions/divestitures, favorable foreign currency exchange rate movements, and pricing and productivity improvements in excess of inflation and investment spending,spending. favorableThese foreignincreases currencywere exchangepartially rateoffset movements,by the year-over-year decrease inhigher restructuring, integrationintegration, and acquisition expenses, as well as the impairment charges recorded in the prior year.expenses.

Interest expense for the year ended December 31, 2024,2025, increaseddecreased $8.9$1.0 million as compared to the year ended December 31, 2023,2024, primarily due to highera lower weighted-average interest rate on our outstanding indebtedness compared to the same period in the prior year.indebtedness.

For the year ended December 31, 2024,2025, Other income, net, increaseddecreased $18.2$10.2 million compared to 2023,2024, primarily due to higherless interest income generated as a result of less cash on hand andthroughout higherthe interestyear ratesdue earnedto onthe deposits.increase in acquisition activity.

For the year ended December 31, 2024,2025, our effective tax rate was 14.5%,16.2%, compared to 12.4%14.5% for the year ended December 31, 2023.2024. The increase in the effective income tax rate was primarily due to the enactment of Global Minimum Tax and theunfavorable mix of income earned in higher tax rate jurisdictions.jurisdictions and year over year changes in amounts recognized for uncertain tax positions and income tax credits, which were partially offset by the enactment of legislative changes.

We operate in and report financial results for two segments: Allegion Americas and Allegion International. These segments represent the level at which our chief operating decision maker (the "CODM") reviews our financial performance and makes operating decisions.

Our Allegion Americas segment is a leading provider of security products, services and solutions throughout North America. The segment sells a broad range of products and solutions including, locks, locksets, portable locks, key systems, door controls and door control systems, exit devices, doors, glass and door systems, accessories, electronic security products, access control systems and software and service solutions to customers in commercial, institutional and residential facilities, including the education, healthcare, government, hospitality, retail, commercial office and single and multi-family residential markets. This segment’s primary brands are LCN, Schlage, Von Duprin and Stanley Access Technologies, which we utilize with permission in accordance with the terms of an agreement with StanleySTANLEY Black & Decker ("Stanley" is the property of Stanley Logistics L.L.C).Decker.

The increase in Net revenues was driven by improved pricingpricing, the favorable impact of acquisitions and thehigher impact from our acquisitions made during the year.volumes. These increases were partially offset by slightly lower volumes and unfavorable foreign currency exchange rate movements.

Growth in Americas electronic security products and solutions is a metric monitored by management and a focus of our investors. Electronic products encompass both residential and non-residential products, and include all electrified product categories including, but not limited to, electronic and electrified locks, access control systems and electronic and electrified door controls and systems and exit devices. Net revenues from the sale of electronic products decreasedincreased by a lowlow-double single-digitsdigits percent compared to 2023. In 2023, we experienced a low-twenties percent increase compared to 2022, driven by improvements around the availability of materials and components.2024. We continue to believe electronic products are a long-term growth driver.

The increase in Segment operating income was primarily driven by favorable volume/product mix, pricing and productivity improvements in excess of inflation and investment spending, the favorable volume/productimpact mix,of recent acquisitions, lower restructuring, integration, and acquisition expenses and favorable foreign currency exchange rate movements, operating income from our acquired businesses and a year-over-year decrease in restructuring, integration, and acquisition expenses.movements.

Our Allegion International segment provides security products, services and solutions primarily throughout Europe, Asia and Oceania. The segment offers end-users a broad range of products, services and solutions including locks, locksets, portable locks, key systems, door controls and door control systems, exit devices, doors, electronic security products, access control systems, time and attendance and workforce productivity solutions, among other software and service solutions. This segment’s primary brands are AXA, CISA, ELATEC, Gainsborough, Interflex, and SimonsVoss.

The increase in Net revenues was driven by improvedthe pricing, thefavorable impact from ourrecent acquisitions made during the year and/divestitures, favorable foreign currency exchange rate movements.movements and improved pricing. These increases were partially offset by lower volumes.

Operating income marginIncome/Margin

The increases in Segment operating income and Segment operating margin were primarily driven by pricingthe favorable impact from acquisitions/divestitures and productivity improvements in excess of inflation and investment spending, favorable movements in foreign currency exchange rates, current year acquisition activity and impairment charges on intangible assets recorded in the prior year.rates. These increases were partially offset by higher restructuring, integration and acquisition expenses, unfavorable volume/product mix and ainflation year-over-yearand increaseinvestment spending in restructuring,excess integrationof pricing and acquisitionproductivity expenses.improvements. Macroeconomic conditions in our International markets remain mixed.

Our short-term financing needs primarily consist of working capital requirements, restructuring initiatives, capital spending, potential acquisitions, dividend payments and principal and interest payments on our long-term debt. Long-term financing needs depend largely on potential growth opportunities, including potential acquisitions, repayment or refinancing of our long-term obligations and repurchases of our ordinary shares. Of our total outstanding indebtedness as of December 31, 2024,2025, approximately 89%90% incurs fixed-rate interest and is therefore not exposed to the risk of rising variable interest rates.

Based upon our operations, existing cash balances and unused availability under the Revolving Facility, as of December 31, 2024,2025, we expect cash flows from operations to be sufficient to maintain a sound financial position and liquidity and to meet our financing needs for at least the next 12twelve months. Further, we do not anticipate any covenant compliance challenges with any of our outstanding indebtedness for at least the next 12twelve months. We also believe existingunused availability under the CreditRevolving FacilitiesFacility and access to credit and capital markets are sufficient to achieve our longer-term strategic plans.

Operating activities: Net cash provided by operating activities for the year ended December 31, 2024,2025, increased by $74.4$108.8 million compared to 2023,2024, driven primarily by higher net earnings and improvementsless incash used for working capital.

Investing activities: Net cash used in investing activities for the year ended December 31, 2024,2025, increased by $99.3$457.1 million compared to 2023,2024, primarily due to thehigher acquisitioncash activityused infor 2024acquisitions and a $7.9 millionan increase in capital expenditures compared to 2023. These increases were partially offset by a decrease in other investments compared to 2023.expenditures.

Financing activities: Net cash used in financing activities for the year ended December 31, 2024,2025, increaseddecreased by $95.8$127.8 million compared to 2023.2024. The change in cash used in financing activities was primarily due to ana increasedecrease in cash used for share repurchases and dividend payments,repurchases, partially offset by lowerhigher net repayments on debt comparedand tohigher 2023.dividend payments.

There have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the periodyear ended December 31, 2025. For a further discussion of our Risk Factors, refer to the “Risk Factors” discussion contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

Allegion plc and its consolidated subsidiaries (“Allegion,” “the CompanyCompany,”, “we,” “our,” or “us”) are a leading global provider of security products and solutions operating in two segments: Allegion Americas and Allegion International. We sell a wide range of security products and solutions for end-users in commercial, institutional and residential facilities worldwide, including the education, healthcare, government, hospitality, retail, commercial office and single and multi-family residential markets. Our leading brands include CISA®, Interflex®, LCN®, Schlage®, SimonsVoss® and Von Duprin®.

In the firstsecond quarter of 2026, we delivered high-singlelow-double digit revenue growth compared to the same period in 2025, driven by volume growth, favorable pricing and the impact from recent acquisitions in both the Allegion Americas and Allegion International segments.acquisitions. Demand for electronic security products has also remained strong and continues to be a long-term growth driver.

On February 20, 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) were invalid, and in March 2026, the U.S. Court of International Trade further ruled that importers that paid such tariffs are due refunds. In the second quarter of 2026, U.S. Customs and Border Protection launched a system to process IEEPA tariff refund claims, and we formally submitted claims for qualifying IEEPA tariff refunds. Refunds received related to those claims have not been significant. Although we may be entitled to additional refunds of previously paid IEEPA tariffs, the amount and timing of any such refunds remain uncertain, and as of MarchJune 31,30, 2026,2026 we have not recorded any amounts relatedfor recoveries that have not been received. The global tariff landscape continues to potentialshift, recoveries.and Wewe continue to monitor these developments and assess their potential impacts.

Following these rulings, new tariffs were imposed under other laws and on imports from more countries were imposed,countries, in addition to existing non-IEEPA tariffs. Through the threesix months ended MarchJune 31,30, 2026, we have offset inflation due to tariffs with pricing actions. We continue to analyze the impact of changes in tariffs and what,what steps, if any, steps, including pricing actions, we may take to mitigate the impact of the tariffs. We estimate we source approximately 20-25% of cost of goods sold (“COGS”) from Mexico, less than 5% of COGS from China, and 5-10% of COGS from all other non-USnon-U.S. countries. Additionally, existingExisting or new tariffs could impact future demand.

On March 2, 2026, the Company,we, through itsour subsidiaries, acquired 100% of Door Components, Inc. (“DCI”), a manufacturer of custom, quick ship hollow metal doors and frames for industrial, commercial and institutional markets based in the United States. DCI is reported in the Company’s Allegion Americas segment. The purchase consideration, net of cash acquired, was approximately $70 million. This acquisition was accounted for as a business combination and was funded with available cash on hand and borrowings under the Revolving Facility.

During the threesix months ended MarchJune 31,30, 2026, we paid dividends of $0.55$1.10 per ordinary share to shareholders and repurchased approximately 0.3 million shares for $40.6 million.shareholders.

On April 15, 2026, the Board replenished the funds available for the repurchase of the Company’s ordinary shares under its existing share repurchase program and, as a result, authorized the repurchase of a total amount of up to $500.0 million of the Company’s ordinary shares under the program. During the six months ended June 30, 2026, we repurchased approximately 1.2 million shares for $160.6 million.

Results of Operations – Three months ended MarchJune 3130

Net revenues for the three months ended MarchJune 31,30, 2026, increased by 9.7%,12.7%, or $91.7$129.5 million, compared with the same period in 2025, due to the following:

The increase in Net revenues was driven by higher volumes, improved pricing, the favorable impact from acquisitions, net of divestitures, improved pricingdivestitures and favorable foreign currency exchange rate movements. These increases were partially offset by lower volumes.

Operating income for the three months ended MarchJune 31,30, 2026, decreasedincreased $1.1$35.0 million compared to the same period in 2025. Operating margin, which we define as Operating income as a percentage of total Net revenues, for the three months ended MarchJune 31,30, 2026, decreasedincreased to 18.9%22.1% from 20.9%21.5% for the same period in 2025, due to the following:

The decreaseincrease in Operating income was driven by unfavorablefavorable volume/product mix and higher acquisition, integration and restructuring expenses. These decreases were partially offset bymix, pricing and productivity improvements in excess of inflation and investment spending,spending and the favorable impact from acquisitions/divestitures. These increases were partially offset by higher acquisition, integration and favorablerestructuring expenses and unfavorable foreign currency exchange rate movements, inclusive of transactional foreign currency.

The decreaseincrease in Operating margin was driven by favorable volume/product mix and pricing and productivity improvements in excess of inflation and investment spending. These increases were partially offset by higher acquisition, integration and restructuring expenses, unfavorable volume/product mix, unfavorable foreign currency exchange rate movements, inclusive of transactional foreign currency,currency and the unfavorable impact on operating margin from acquisitions/divestituresacquisitions, and inflation and investment spending in excessnet of pricing and productivity improvements.divestitures.

Interest expense for the three months ended MarchJune 31,30, 2026, decreasedincreased $0.5$0.2 million compared with the same period in 2025, primarily due to ahigher average outstanding indebtedness partially offset by lower weighted-average interest rate on our outstanding indebtedness.rates.

Other Income,Expense (Income), net

The components of Other income,expense (income), net for the three months ended MarchJune 3130 were as follows:

The effective income tax rates for the three months ended MarchJune 31,30, 2026 and 2025, were 19.5%19.0% and 15.4%,20.3%, respectively. The increasedecrease in the effective income tax rate compared to 2025 is primarily due to unfavorable discrete itemscharges in the prior year,year includingand favorable discrete adjustments in the amountscurrent recognized for uncertain tax positions, as well as the mix of income earned in higher tax rate jurisdictions.year.

Segment Results of Operations - For the three and six months ended MarchJune 3130:

Net revenues for the three months ended MarchJune 31,30, 2026, increased by 6.9%,11.8%, or $52.1$97.1 million, compared to the same period in 2025, due to the following:

The increase in Net revenues was driven by higher volumes, improved pricing,pricing and the favorable impact of acquisitions and favorable foreign currency exchange rate movements. These increases were partially offset by lower volumes.acquisitions.

Growth in electronic security products and solutions is a metric that is actively monitored by management and a focus of our investors. Electronic products encompass both residential and non-residential solutions and include all electrified product categories including, but not limited to, electronic and electrified locks, access control systems and electronic and electrified door controls and systems and exit devices. For the three months ended MarchJune 31,30, 2026, Net revenues from the sale of electronic products in the Allegion Americas segment increased by a mid-single digitslow-teens percent compared to the same period in the prior year. We expect continued growth in our electronic products in 2026.

Segment operating income for the three months ended MarchJune 31,30, 2026, increased $3.7$30.2 million compared to the same period in 2025, and Segment operating margin for the three months ended MarchJune 31,30, 2026, decreasedincreased to 26.6%29.0% from 27.9%,28.8%, due to the following:

The increase in Segment operating income was primarily driven by favorable volume/product mix, pricing and productivity in excess of inflation and investment spending and the favorable impact of recent acquisitions. These increases were partially offset by unfavorable volume/product mix, higher acquisition, integration, and restructuring expenses and unfavorable foreign currency exchange rate movements, inclusive of transactional foreign currency.currency and higher acquisition, integration, and restructuring expenses.

The decreaseincrease in Segment operating margin was primarily driven by unfavorablefavorable volume/product mix, the unfavorable impact on operating margin from recent acquisitions, higher acquisition, integration,mix and restructuring expenses and unfavorable foreign currency exchange rate movements, inclusive of transactional foreign currency. These decreases were partially offset by pricing and productivity improvements in excess of inflation and investment spending. These increases were partially offset by the unfavorable impact on operating margin from recent acquisitions, unfavorable foreign currency exchange rate movements, inclusive of transactional foreign currency and higher acquisition, integration, and restructuring expenses.

Our Allegion International segment provides security products, services and solutions primarily throughout Europe, Asia and Oceania. The segment offers end-users a broad range of products, services and solutions including locks, locksets, portable locks, key systems, door controls and door control systems, exit devices, doors, electronic security products, access control systems, time and attendance and workforce productivity solutions, among other software and service solutions. This segment’s primary brands are AXA, CISA, ELATEC, Gainsborough, Interflex,Interflex and SimonsVoss.

Net revenues for the three months ended MarchJune 31,30, 2026, increased by 21.5%,16.2%, or $39.6$32.4 million, compared to the same period in 2025, due to the following:

The increase in Net revenues was primarily driven by the favorable impact from acquisitions, net of divestitures, favorable foreign currency exchange rate movements and improved pricing. These increases were partially offset by lower volumes.

Segment operating income for the three months ended MarchJune 31,30, 2026, decreased $3.4$0.9 million compared to the same period in 2025, and Segment operating margin for the three months ended MarchJune 31,30, 2026, decreased to 3.7%6.4% from 6.3%,7.8%, due to the following:

The decrease in Segment operating income and Segment operating margin was primarily driven by higher acquisition, integration and restructuring expenses, inflation and investment spending in excess of pricing and productivity improvements,improvements and the unfavorable impact from volume/product mix and higher acquisition, integration and restructuring expenses.mix. These decreases were partially offset by the favorable impact from recent acquisitions/divestitures and the favorable impact from foreign currency exchange rate movements.