Allison Transmission Announces Fourth Quarter and Full Year 2025 Results

Rhea-AI Summary

Allison Transmission (NYSE: ALSN) reported full year 2025 net sales of $3,010 million, net income of $623 million and Adjusted EBITDA of $1,130 million (37.5% of net sales, +140 bps). The company completed the acquisition of Dana's Off-Highway business on Jan 1, 2026 and repurchased $328 million of stock (about 4% of shares).

Q4 2025 net sales were $737 million with quarterly net income of $99 million. 2026 guidance: consolidated net sales $5,575–$5,925 million and Adjusted EBITDA $1,365–$1,515 million, including acquisition-related one-time costs.

Positive

• Adjusted EBITDA of $1,130M (37.5% of net sales)
• Defense net sales +26% to $267M
• Completed acquisition of Dana Off-Highway business (Jan 1, 2026)
• Repurchased $328M of common stock (~4% outstanding)
• Generated net cash from operations of $836M

Negative

• Total net sales down $215M year over year to $3,010M
• Q4 net income declined $76M versus prior-year quarter
• Acquisition-related and integration one-time costs (~$70M pre-tax guidance)
• Full year 2025 results exclude impact from the Dana Off-Highway acquisition

Key Figures

2025 Net sales: $3,010 million 2025 Net income: $623 million 2025 Adjusted EBITDA: $1,130 million +5 more

8 metrics

2025 Net sales $3,010 million Full year 2025 total net sales

2025 Net income $623 million Full year 2025 net income, 21% of net sales

2025 Adjusted EBITDA $1,130 million Full year 2025, 37.5% of net sales, +140 bps YoY

Defense net sales 2025 $267 million Full year 2025 Defense end market, +26% year over year

Outside NA On-Highway 2025 $507 million Record full year 2025 net sales, +$14M YoY

Q4 2025 net income $99 million Quarterly net income vs. $175M in Q4 2024

2026 net sales guide $5,575–$5,925 million Full year 2026 consolidated net sales guidance

2026 FCF guide $655–$805 million Full year 2026 consolidated adjusted free cash flow guidance

Market Reality Check

Price: $116.84 Vol: Volume 933,597 is 18% abo...

normal vol

$116.84 Last Close

Volume Volume 933,597 is 18% above the 20-day average of 793,186, indicating elevated interest into the earnings release. normal

Technical Shares at $118.85 are trading above the 200-day MA of $94.35 and sit 0.53% below the 52-week high of $119.48.

Peers on Argus

ALSN is up 0.91% with slightly elevated volume, while close auto-parts peers sho...

ALSN is up 0.91% with slightly elevated volume, while close auto-parts peers show mixed moves (e.g., MOD +3.01%, LKQ +2.68%, BWA -0.82%, ALV -0.24%). With no peers in the momentum scanner and no same-day peer headlines, the move appears stock-specific to these results.

Previous Earnings Reports

5 past events · Latest: Oct 29 (Negative)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Oct 29	Q3 2025 earnings	Negative	-0.6%	Net sales decline vs. 2024 and lowered full-year 2025 guidance ranges.
Aug 04	Q2 2025 earnings	Positive	-1.8%	Record EPS, higher margins and announcement of $2.7B Dana Off-Highway deal.
May 01	Q1 2025 earnings	Positive	+4.1%	Double‑digit EPS and net income growth with strong 37.5% EBITDA margin.
Feb 11	FY 2024 earnings	Positive	-12.5%	Record 2024 net sales and EPS with strong shareholder returns and 2025 guidance.
Oct 29	Q3 2024 earnings	Positive	+7.9%	Record Q3 2024 sales, EPS growth and raised full-year 2024 guidance.

Pattern Detected

Across the last five earnings releases, reactions have been mixed: generally strong fundamentals often met with both rallies and selloffs, including two notable selloffs on positive reports, suggesting expectations and positioning play a key role.

Recent Company History

Recent earnings for Allison show a pattern of strong profitability and cash generation. Q3 2024 delivered record net sales of $824 million and net income of $200 million. Full year 2024 net sales reached a record $3.2 billion. Through 2025, Q1–Q3 earnings maintained high margins, record EPS and robust cash flow, while also layering in the Dana Off-Highway acquisition announcement. Against that backdrop, the new 2025 results and 2026 guidance extend a multi‑quarter story of high margins, strong cash returns, and strategic expansion.

Historical Comparison

-0.6% avg move · Over the last five earnings releases, ALSN’s average next‑day move was -0.57%, with rallies on some ...

earnings

-0.6%

Average Historical Move earnings

Over the last five earnings releases, ALSN’s average next‑day move was -0.57%, with rallies on some record quarters but notable selloffs on strong reports, reflecting sensitivity to expectations.

Earnings history shows Allison moving from record 2024 results into 2025 with sustained high margins while layering in the Dana Off-Highway acquisition, shifting the story from pure organic growth to a larger, two‑segment platform.

Market Pulse Summary

This announcement underscores Allison’s ability to sustain high profitability, with 2025 adjusted EB...

Analysis

This announcement underscores Allison’s ability to sustain high profitability, with 2025 adjusted EBITDA of $1,130 million at a 37.5% margin and adjusted free cash flow of $661 million. The company posted record Outside North America On‑Highway sales and strong Defense growth, while Q4 net income declined to $99 million on impairments and deal costs. Looking ahead, investors may watch 2026 guidance execution, integration of the Off‑Highway business, and margin performance across both segments.

Key Terms

adjusted ebitda, adjusted free cash flow, diluted eps, basis points, +4 more

8 terms

adjusted ebitda financial

"Full year Adjusted EBITDA of $1,130 million, 37.5% of Net Sales..."

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

adjusted free cash flow financial

"generated Adjusted free cash flow of $661 million."

Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company's financial health more clearly.

diluted eps financial

"Diluted EPS for the year was $7.33."

Diluted earnings per share (EPS) shows how much profit a company makes for each share of stock, assuming all possible shares from stock options or convertible securities are used. It provides a more conservative estimate than basic EPS, accounting for potential share increases that could dilute ownership. Investors use diluted EPS to get a clearer picture of a company's true profitability on a per-share basis.

basis points financial

"a year over year increase of 140 basis points"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

net cash provided by operating activities financial

"net cash provided by operating activities of $836 million."

Cash a company actually generates from its regular business activities during a reporting period, after accounting for day-to-day receipts and payments and excluding one-time financing or investing moves. Think of it as the cash left over from running a store each month after paying suppliers, wages and handling changes in inventory and customer payments, not counting loans or asset sales. Investors use it to judge whether the business can fund operations, pay debts and grow without relying on outside cash.

rule 10b5-1 trading plan financial

"transactions under a Rule 10b5-1 trading plan adopted on August 26, 2025"

A Rule 10b5-1 trading plan is a pre-arranged schedule that allows company insiders to buy or sell stock at specific times, even if they have inside information. It helps prevent accusations of unfair trading by making these transactions look planned and transparent, rather than sneaky or illegal.

performance stock units financial

"acquired 78,893 performance stock units, each representing a right..."

Performance stock units are a type of company award that grants employees shares of stock only if certain performance goals are met. They motivate employees to work toward specific company achievements, aligning their interests with those of shareholders. For investors, they can influence a company's future stock supply and reflect management’s confidence in reaching key targets.

restricted stock units financial

"was awarded 11,393 restricted stock units (RSUs)..."

Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.

AI-generated analysis. Not financial advice.

• Record fourth quarter and full year Net Sales in the Outside North America On-Highway end market
• Continued strength in the Defense end market, with full year Net Sales of $267 million, a year over year increase of 26 percent
• Full year Net Income of $623 million, 21% of Net Sales
• Full year Adjusted EBITDA of $1,130 million, 37.5% of Net Sales, a year over year increase of 140 basis points
• Completed acquisition of the Dana Off-Highway business on January 1, 2026, creating a premier, global industrial leader in high-performance mobility and work solutions

INDIANAPOLIS, Feb. 23, 2026 /PRNewswire/ -- Allison Transmission Holdings Inc. (NYSE: ALSN) today reported full year 2025 net sales of $3 billion with Adjusted EBITDA margin of 37.5 percent and net cash provided by operating activities of $836 million.

David S. Graziosi, Chair, President and Chief Executive Officer of Allison commented, "Although 2025 presented meaningful macroeconomic challenges, we remained disciplined and focused on the factors within our control. With a prioritization of cost management and execution aligned with end markets demand conditions, our full year results demonstrate the resilient earnings power of our business in difficult and uncertain operating environments. For the full year, we achieved an Adjusted EBITDA margin of 37.5 percent and generated Adjusted free cash flow of $661 million."

Graziosi continued, "Earlier this year, we announced the completion of our acquisition of Dana's Off-Highway business, a transformational moment in Allison history. With the combination of these two industry-leading businesses, we have significantly expanded both our presence in the global mobility market and our portfolio of high-quality and reliable products, creating a platform that will continue to deliver strong financial performance from both organic and inorganic growth. While completing this acquisition last year, we remained committed to our capital allocation priorities, including repurchasing $328 million of our common stock, representing 4 percent of outstanding shares."

Full Year and Fourth Quarter Financial Highlights*

Net sales for the year were $3,010 million. Year over year results were led by:

• A 26 percent increase in net sales in the Defense end market principally driven by the continued execution of our growth initiatives
• A $14 million increase in net sales in the Outside North America On-Highway end market, leading to record full year net sales of $507 million, principally driven by higher demand in Europe and South America and price increases on certain products, partially offset by lower demand in Asia

*The fourth quarter and full year 2025 financial results included in this press release do not reflect the impact from the acquisition of Dana's Off-Highway business.

Net income for the year was $623 million. Diluted EPS for the year was $7.33. Adjusted EBITDA, a non-GAAP financial measure, for the year was $1,130 million. Net cash provided by operating activities for the year was $836 million. Adjusted free cash flow, a non-GAAP financial measure, for the year was $661 million.

Net sales for the quarter were $737 million. Year over year results were led by:

• A 6 percent increase in net sales in the Outside North America On-Highway end market, leading to record fourth quarter net sales of $131 million, principally driven by higher demand in Europe
• A 7 percent increase in net sales in the Defense end market principally driven by the continued execution of our growth initiatives

Net income for the quarter was $99 million. Diluted EPS for the quarter was $1.18. Adjusted EBITDA, a non-GAAP financial measure, for the quarter was $265 million. Net cash provided by operating activities for the quarter was $243 million. Adjusted free cash flow, a non-GAAP financial measure, for the quarter was $169 million.

Full Year and Fourth Quarter Net Sales by End Market

End Market	2025 Net Sales ($M)	Year over Year Variance ($M)	Q4 2025 Net Sales ($M)	Year over Year Variance ($M)
North America On-Highway	$1,540	($212)	$361	($58)
Outside North America On-Highway	$507	$14	$131	$7
Global Off-Highway	$53	($52)	$12	($4)
Defense	$267	$55	$73	$5
Service Parts, Support Equipment & Other	$643	($20)	$160	($9)
Total Net Sales	$3,010	($215)	$737	($59)

Fourth Quarter Financial Results

Gross profit for the quarter was $354 million, a decrease of $19 million from $373 million for the same period in 2024. The decrease in gross profit was principally driven by lower volumes and unfavorable direct material costs, partially offset by price increases on certain products and lower manufacturing expense. Gross margin for the quarter was 48 percent, an increase of 110 basis points year over year.

Selling, general and administrative expenses for the quarter were $110 million, an increase of $26 million from $84 million for the same period in 2024. The increase was principally driven by the Dana Off-Highway business acquisition-related expenses of approximately $26 million.

Engineering – research and development expenses for the quarter were $44 million, a decrease of $10 million from $54 million for the same period in 2024. The decrease was principally driven by reduced product initiatives spending to align costs and programs across our business with end markets demand conditions.

Net income for the quarter was $99 million, a decrease of $76 million from $175 million for the same period in 2024. The decrease was principally driven by a $29 million loss associated with impairment of long-lived assets and $26 million of expenses related to the acquisition of Dana's Off-Highway business and lower gross profit.

Net cash provided by operating activities was $243 million, an increase of $32 million from $211 million for the same period in 2024. The increase was principally driven by lower cash income taxes, reduced engineering – research and development spending and lower operating working capital funding requirements, partially offset by lower gross profit and payments for the Dana Off-Highway business acquisition-related expenses.

Full Year 2026 Guidance

For full year 2026, we are providing the following guidance:

• Consolidated net sales in the range of $5,575 to $5,925 million
• Net sales for the Allison Transmission segment in the range of $3,025 to $3,175 million
• Net sales for the Allison Off-Highway Drive and Motion Systems segment in the range of $2,550 to $2,750 million
• Consolidated net income in the range of $600 to $750 million, subject to the completion of purchase price accounting associated with the acquisition of the Off-Highway Drive and Motion Systems segment
  • Net income guidance includes approximately $70 million of one-time, pre-tax expenses associated with the separation, integration and restructuring of the Off-Highway Drive and Motion Systems segment. Including one-time costs, the Allison Off-Highway acquisition is expected to be accretive to net income and Diluted EPS in 2026
• Consolidated Adjusted EBITDA in the range of $1,365 to $1,515 million
• Consolidated net cash provided by operating activities in the range of $970 to $1,100 million, including approximately $55 million of one-time cash outlays associated with the acquisition of the Off-Highway Drive and Motion Systems business unit
• Consolidated capital expenditures in the range of $295 to $315 million, including one-time separation and integration capital expenditures of approximately $45 million
• Consolidated Adjusted free cash flow in the range of $655 to $805 million

Conference Call and Webcast

The Company will host a conference call at 5:00 p.m. EST on Monday, February 23, 2026 to discuss its fourth quarter 2025 results. The dial-in phone number for the conference call is +1-877-425-9470 and the international dial-in number is +1-201-389-0878. A live webcast of the conference call will also be available online at https://ir.allisontransmission.com. 

For those unable to participate in the conference call, a replay will be available from 9:00 p.m. EST on February 23 until 11:59 p.m. EST on March 9. The replay dial-in phone number is +1-844-512-2921 and the international replay dial-in number is +1-412-317-6671. The replay passcode is 13757957.

About Allison Transmission

Allison Transmission (NYSE: ALSN) is a global leader in high-performance mobility and work solutions built for the needs of the modern industrial world. Allison operates through two business units: Allison Transmission and Allison Off-Highway Drive & Motion Systems. Headquartered in Indianapolis, Indiana, USA, the Company manufactures solutions which offer industry-leading value propositions across vital sectors such as infrastructure, mining, energy, agriculture, construction, transportation and national security. For over 110 years, Allison has been recognized as a reliable partner of choice, keeping essential industries moving anytime, in over 150 countries around the world. For more information, visit https://allisontransmission.com. 

Forward-Looking Statements

This press release contains forward-looking statements. The words "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although forward-looking statements reflect management's good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements speak only as of the date the statements are made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to: the significant costs we are expected to incur in connection with the integration of the Off-Highway Drive & Motion Systems business (the "Acquired Off-Highway Business") of Dana Incorporated ("Dana"); our ability to successfully integrate the Acquired Off-Highway Business and its operations in the expected time frame; our ability to realize all of the anticipated benefits from the integration of the Acquired Off-Highway Business and its operations and to effectively manage our expanded operations; our participation in markets that are competitive; our ability to prepare for, respond to and successfully achieve our objectives relating to technological and market developments, competitive threats and changing customer needs, including with respect to electric hybrid and fully electric commercial vehicles; increases in cost, disruption of supply or shortage of labor, freight, raw materials, energy or components used to manufacture or transport our products or those of our customers or suppliers, including as a result of geopolitical risks, natural disasters, extreme weather events, wars and public health crises such as pandemics; global economic volatility; general economic and industry conditions, including the risk of prolonged inflation and recession; labor strikes, work stoppages or similar labor disputes, which could significantly disrupt our operations or those of our principal customers or suppliers; the highly cyclical industries in which certain of our end users operate; uncertainty in the global regulatory and business environments in which we operate; the concentration of our net sales in our top five customers and the loss of any one of these; cybersecurity risks to our operational systems, security systems or infrastructure owned by us or our third-party vendors and suppliers; the failure of markets outside North America to increase adoption of fully automatic transmissions; the success of our research and development efforts, the outcome of which is uncertain; U.S. and foreign defense spending; risks associated with our international operations, including acts of war and increased trade protectionism and tariffs; the discovery of defects in our products, resulting in delays in new model launches, recall campaigns and/or increased warranty costs and reduction in future sales or damage to our brand and reputation; our ability to identify, consummate and effectively integrate acquisitions and collaborations; and risks related to our indebtedness.

Use of Non-GAAP Financial Measures

This press release contains information about Allison's financial results and forward-looking estimates of financial results which are not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of this press release. Non-GAAP financial measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures of other companies.

We use Adjusted EBITDA and Adjusted EBITDA as a percent of net sales to measure our operating profitability. We believe that Adjusted EBITDA and Adjusted EBITDA as a percent of net sales provide management, investors and creditors with useful measures of the operational results of our business and increase the period-to-period comparability of our operating profitability and comparability with other companies. Adjusted EBITDA as a percent of net sales is also used in the calculation of management's incentive compensation program. The most directly comparable GAAP measure to Adjusted EBITDA is Net income. The most directly comparable GAAP measure to Adjusted EBITDA as a percent of net sales is Net income as a percent of net sales. Adjusted EBITDA is calculated as the earnings before interest expense, net, income tax expense, amortization of intangible assets, depreciation of property, plant and equipment and other adjustments as defined by Allison Transmission, Inc.'s, the Company's wholly-owned subsidiary, Second Amended and Restated Credit Agreement. Adjusted EBITDA as a percent of net sales is calculated as Adjusted EBITDA divided by net sales.

We use Adjusted Free Cash Flow to evaluate the amount of cash generated by our business that, after the capital investment needed to maintain and grow our business and certain mandatory debt service requirements, can be used for repayment of debt, stockholder distributions and strategic opportunities, including investing in our business. We believe that Adjusted Free Cash Flow enhances the understanding of the cash flows of our business for management, investors and creditors. Adjusted Free Cash Flow is also used in the calculation of management's incentive compensation program. The most directly comparable GAAP measure to Adjusted Free Cash Flow is Net cash provided by operating activities. Adjusted Free Cash Flow is calculated as Net cash provided by operating activities, after additions of long-lived assets.

Attachments

• Condensed Consolidated Statements of Operations
• Condensed Consolidated Balance Sheets
• Condensed Consolidated Statements of Cash Flows
• Reconciliation of GAAP to Non-GAAP Financial Measures
• Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year Guidance

 

Allison Transmission Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, dollars in millions, except per share data)
		Three months ended Decemeber 31,				Years ended December 31,
		2025		2024		2025		2024
Net sales		$                   737		$                   796		$                3,010		$                3,225
Cost of sales		383		423		1,547		1,696
Gross profit		354		373		1,463		1,529
Selling, general and administrative		110		84		380		336
Engineering - research and development		44		54		174		200
Loss associated with impairment of long-lived assets		29		-		29		1
Operating income		171		235		880		992
Interest expense, net		(25)		(21)		(92)		(89)
Other income (expense), net		1		(4)		16		(6)
Income before income taxes		147		210		804		897
Income tax expense		(48)		(35)		(181)		(166)
Net income		$                      99		$                   175		$                   623		$                   731
Basic earnings per share attributable to common stockholders		$                  1.19		$                  2.03		$                  7.42		$                  8.40
Diluted earnings per share attributable to common stockholders		$                  1.18		$                  2.01		$                  7.33		$                  8.31

 

Allison Transmission Holdings, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, dollars in millions)
					December 31,		December 31,
					2025		2024
ASSETS
Current Assets
Cash and cash equivalents					$                1,495		$                781
Accounts receivable, net					333		360
Inventories					316		315
Other current assets					89		82
Total Current Assets					2,233		1,538
Property, plant and equipment, net					862		803
Intangible assets, net					794		822
Goodwill					2,075		2,075
Other non-current assets					118		98
TOTAL ASSETS					$                6,082		$            5,336
LIABILITIES
Current Liabilities
Accounts payable					$                   190		$                212
Product warranty liability					34		31
Current portion of long-term debt					5		5
Deferred revenue					34		41
Other current liabilities					197		217
Total Current Liabilities					460		506
Product warranty liability					50		36
Deferred revenue					103		95
Long-term debt					2,885		2,395
Deferred income taxes					557		501
Other non-current liabilities					160		152
TOTAL LIABILITIES					4,215		3,685
TOTAL STOCKHOLDERS' EQUITY					1,867		1,651
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY					$                6,082		$            5,336

 

Allison Transmission Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, dollars in millions)
						Three months ended December 31,				Years ended December 31,
						2025		2024		2025		2024
Net cash provided by operating activities						$                   243		$                   211		$                   836		$                   801
						-
Net cash used for investing activities (a)						(76)		(77)		(184)		(147)
Net cash provided by (used for) financing activities						425		(140)		57		(427)
Effect of exchange rate changes on cash						1		(1)		5		(1)
Net increase (decrease) in cash and cash equivalents						593		(7)		714		226
Cash and cash equivalents at beginning of period						902		788		781		555
Cash and cash equivalents at end of period						$                1,495		$                   781		$                1,495		$                   781
Supplemental disclosures:
Income taxes paid						$                      (6)		$                    (40)		$                  (107)		$                  (190)
Interest paid						$                    (33)		$                    (33)		$                  (120)		$                  (124)
Interest received from interest rate swaps						$                       -		$                        2		$                        6		$                      12
(a)  Additions of long-lived assets						$                    (74)		$                    (75)		$                  (175)		$                  (143)

 

Allison Transmission Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited, dollars in millions)
						Three months ended				Years ended
						December 31,				December 31,
						2025		2024		2025		2024
Net income (GAAP)						$             99		$          175		$           623		$          731
plus:
Income tax expense						48		35		181		166
Depreciation of property, plant and equipment						30		29		117		111
Interest expense, net						25		21		92		89
Amortization of intangible assets						2		2		7		10
Acquisition-related expenses (a)						26		-		64		-
Loss associated with impairment of long-lived assets (b)						29		-		29		1
Stock-based compensation expense (c)						7		6		27		26
Unrealized (gain) loss on marketable securities (d)						(1)		1		(12)		9
UAW Local 933 contract signing incentives (e)						-		-		-		14
Pension plan settlement loss (f)						-		-		-		4
Other (g)						-		1		2		4
Adjusted EBITDA (Non-GAAP)						$           265		$          270		$        1,130		$       1,165
Net sales (GAAP)						$           737		$          796		$        3,010		$       3,225
Net income as a percent of Net sales (GAAP)						13.4 %		22.0 %		20.7 %		22.7 %
Adjusted EBITDA as a percent of Net sales (Non-GAAP)						36.0 %		33.9 %		37.5 %		36.1 %
Net cash provided by operating activities (GAAP) (h)						$           243		$          211		$           836		$          801
Deductions to reconcile to Adjusted free cash flow:
Additions of long-lived assets						(74)		(75)		(175)		(143)
Adjusted free cash flow (Non-GAAP) (h)						$           169		$          136		$           661		$          658

(a)	Represents acquisition-related expenses (recorded in Selling, general and administrative), primarily consulting and legal fees, related to the acquisition of the Dana Off-Highway business (the "Acquisition").
(b)	Represents a charge associated with the impairment of long-lived assets related to the production of certain electrified products.
(c)	Represents stock-based compensation expense (recorded in Cost of sales, Selling, general and administrative, and Engineering — research and development).
(d)	Represents unrealized (gains) losses (recorded in Other income (expense), net) primarily related to an investment in the common stock of Jing-Jin Electric Technologies Co. Ltd.
(e)	Represents non-recurring incentives (recorded in Cost of sales, Selling, general and administrative, and Engineering — research and development) to eligible employees as a result of International Union, United Automobile, Aerospace and Agricultural Implement Workers of America Local 933 represented employees ratifying a four-year collective bargaining agreement effective through November 2027.
(f)	Represents a non-cash settlement charge (recorded in Other income (expense), net) for a pro rata portion of previously unrecognized pension plan actuarial net losses associated with the pension risk transfer of a portion of our salaried defined benefit pension plan obligations to a third-party insurance company.
(g)	Represents other adjustments as defined by the Second Amended and Restated Credit Agreement dated as of March 29, 2019 as amended.
(h)	Net cash provided by operating activities (GAAP) and Adjusted free cash flow (Non-GAAP) include $17 million and $47 million of payments for expenses related to the Acquisition for the three months and year ended December 31, 2025, respectively. There were no payments for expenses related to the Acquisition in either of the three months or year ended December 31, 2024.

 

Allison Transmission Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year Guidance
(Unaudited, dollars in millions)
			Guidance
			Year Ending December 31, 2026
			Low		High
Net income (GAAP)			$                 600		$                 750
plus:
Income tax expense			160		220
Depreciation & Amortization (a)			275		255
Interest expense, net			220		210
Acquisition-related expenses  (b)			50		40
Stock-based compensation expense (c)			30		20
Restructuring & One-Time expenses (d)			30		20
Adjusted EBITDA (Non-GAAP)			$             1,365		$             1,515
Net cash provided by Operating activities (GAAP)			$                 970		$             1,100
Deductions to reconcile to Adjusted free cash flow:
Additions of long-lived assets (e)			$               (315)		$               (295)
Adjusted free cash flow (Non-GAAP)			$                 655		$                 805

(a)	Includes estimate of incremental depreciation and amortization from purchase price accounting of $65 million to $75 million
(b)	Represents acquisition-related expenses (recorded in Selling, general and administrative), primarily consulting and legal fees, related to our acquisition of the Dana Off-Highway business (the "Acquisition").
(c)	Represents stock-based compensation expense (recorded in Cost of sales, Selling, general and administrative, and Engineering — research and development).
(d)	Includes one-time restructuring costs, minority interest and one-time employee retention costs
(e)	Includes one-time acquisition-related investments

 

 

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SOURCE Allison Transmission Holdings Inc.

FAQ

What were Allison Transmission (ALSN) full year 2025 net sales and net income?

Allison reported $3,010 million in net sales and $623 million in net income for 2025. According to the company, Adjusted EBITDA was $1,130 million, representing a 37.5% margin and a 140 basis-point increase year over year.

How did Allison's Defense end market perform in 2025 for ALSN shareholders?

Defense net sales increased 26% to $267 million in 2025. According to the company, growth was driven by execution of growth initiatives and contributed materially to full-year results.

What acquisition did Allison Transmission complete and when was it effective (ALSN)?

Allison completed the acquisition of Dana's Off-Highway business effective January 1, 2026. According to the company, the deal creates a larger global off-highway platform and expands product and market reach.

What guidance did Allison (ALSN) provide for consolidated net sales and Adjusted EBITDA in 2026?

For 2026, Allison guided consolidated net sales of $5,575–$5,925 million and Adjusted EBITDA of $1,365–$1,515 million. According to the company, guidance includes one-time acquisition and integration costs.

How much cash did Allison (ALSN) return to shareholders and how much was repurchased in 2025?

Allison repurchased $328 million of common stock in 2025, representing roughly 4% of outstanding shares. According to the company, buybacks were part of its capital allocation priorities during the acquisition period.

Why did Allison's Q4 2025 net income fall versus Q4 2024 for ALSN?

Q4 2025 net income was $99 million, down due to a $29 million impairment, ~$26 million acquisition-related expenses, and lower gross profit. According to the company, these items materially reduced quarterly earnings versus prior year.