#United States #Indianapolis #Dana Incorporated #Q2 2025 #Allison Transmission

Allison Transmission's Remarkable Q2 2025 Financial Performance

Allison Transmission Holdings Inc. (NYSE: ALSN) has unveiled its second quarter results for 2025, showcasing a strong performance that underscores its position as a leader in the automotive transmission sector. With net sales hitting $814 million, the company marks a notable moment driven by robust demand in its Defense and Off-Highway segments, alongside strategic acquisitions aimed at enhancing its overall capabilities.

Financial Highlights

The company reported a net income of $195 million, translating to an earnings per share (EPS) of $2.29, which is a record for the company. This marks an 8% increase in diluted EPS year-over-year. Additionally, the adjusted EBITDA stood at $313 million, with an impressive adjusted EBITDA margin of 38.5%, reflecting the company's operational efficiency and effective cost management strategies.

A detailed analysis of Allison's sales by market reveals the following:

• - Defense Market: Achieved $63 million in sales, up significantly by $20 million due to strategic growth initiatives.
• - Outside North America On-Highway: Sales grew by $14 million, totaling $142 million, primarily driven by demand increases in South America and Europe.
• - Service Parts and Support Equipment: Increased by $10 million, now reaching $176 million, largely due to heightened demand for parts.
• - Global Off-Highway: Experienced a decline of $7 million, reflecting lower demand in energy and mining sectors.
• - North America On-Highway: Reported a decrease of $39 million to $417 million, mainly impacted by reduced demand for medium-duty trucks, despite price increases.

Strategic Acquisition of Dana Incorporated

In a move that positions the company for future growth, Allison Transmission announced its intention to acquire the Off-Highway business of Dana Incorporated for approximately $2.7 billion. This acquisition is anticipated to close by late 2025 and aims to bolster Allison’s offerings in drivetrain and propulsion solutions, tapping into Dana's established presence in over 25 countries

David S. Graziosi, the Chair and CEO of Allison Transmission, stated, "Delivering record quarterly earnings per share while incurring one-time costs associated with our recently announced acquisition of Dana's Off-Highway business reflects our team's disciplined execution and commitment to strong performance." He emphasized the diversity of Allison's market presence and the growth opportunities afforded by such strategic initiatives.

Operational Insights

The Q2 results highlight Allison's capacity to navigate current economic uncertainties while maximizing operational efficiencies. Key operational metrics were as follows:

• - Gross Profit: Rose to $402 million, an increase from $394 million a year ago, driven by strategic pricing initiatives despite some headwinds from volumes and material costs.
• - Operating Expenses: Selling, general, and administrative expenses increased to $102 million due to acquisition-related costs, a reflection of the scale of Allison's operations and strategic investments.
• - Cash Flow: Net cash generated from operating activities totaled $184 million, suggesting strong cash health and operational strength.

2025 Guidance Revisions

In light of the current market conditions and upcoming acquisition costs, Allison has updated its guidance for the full year 2025. The company expects net sales to range between $3.075 billion to $3.175 billion, with a corresponding net income of $640 million to $680 million. Adjusted EBITDA estimates are projected between $1.13 billion to $1.18 billion, indicating sustained confidence in its financial trajectory.

As of August 4, 2025, Allison Transmission remains well-positioned to adapt to changing market dynamics while pursuing avenues for growth through strategic acquisitions and operational excellence. With a legacy dating back to 1915, its commitment to innovation continues to facilitate its growth and enhance productivity across various sectors.

Conclusion

Allison Transmission's second-quarter results exemplify the strength and reliability that the company has built over decades. With ongoing efforts to diversify its markets and enhance financial performance through acquisitions, Allison is poised to lead in automatic transmission solutions for commercial and defense vehicles. Investors and stakeholders can look forward to positive developments as the company seeks to enhance shareholder value and operational capability.