Allison Transmission Q2 Earnings: Record EPS, Strong Defense Performance, and Strategic Acquisition

Allison Transmission reported Q2 net sales of $814 million, driven by strong Defense and Outside North America On-Highway market performance. The company announced a $2.7 billion acquisition of Dana Incorporated's Off-Highway business, expected to close by year-end. Net income rose 4% to $195 million, and diluted EPS increased 8% to $2.29. Adjusted EBITDA margin improved to 38.5%. Despite a $39 million decrease in the North America On-Highway market, Allison remains positive, with revised full-year 2025 guidance expecting net sales between $3,075 and $3,175 million.

Allison Transmission Holdings Inc. (NYSE: ALSN) reported its second-quarter 2025 financial results, highlighting robust performance across key markets and strategic initiatives. The company's net sales reached $814 million, driven by strong demand in the Defense and Outside North America On-Highway markets. Net income rose 4% to $195 million, with diluted earnings per share (EPS) increasing 8% to $2.29. The adjusted EBITDA margin improved to 38.5%, reflecting the company's operational efficiencies and cost alignment strategies.

The company's performance was bolstered by continued strength in the Defense end market, which saw a $20 million increase in net sales, and record quarterly net sales in the Outside North America On-Highway end market, reaching $142 million. However, there were declines in the Global Off-Highway and North America On-Highway end markets, with decreases of $7 million and $39 million, respectively. These decreases were primarily driven by lower demand for medium-duty trucks and lower demand from the energy, mining, and construction sectors outside of North America.

During the quarter, Allison announced a definitive agreement to acquire Dana Incorporated's Off-Highway business for approximately $2.7 billion. This acquisition is expected to close late in the fourth quarter of 2025 and is anticipated to enhance Allison's market position and growth opportunities. The company also repurchased $102 million of its common stock, representing over 1% of outstanding shares, as part of its capital allocation strategy.

David S. Graziosi, Chair and Chief Executive Officer of Allison Transmission, commented on the results, stating, "Delivering record quarterly earnings per share, while incurring one-time costs associated with our recently announced acquisition of the Dana Off-Highway business, is a clear reflection of the Allison team’s continued focus on execution and delivering strong financial performance."

Allison has revised its full-year 2025 guidance, expecting net sales between $3,075 and $3,175 million, net income between $640 and $680 million, and adjusted EBITDA between $1,130 and $1,180 million. The company anticipates net cash provided by operating activities to be in the range of $785 to $835 million, with capital expenditures between $165 and $175 million.

References:
[1] https://www.truckpartsandservice.com/business/outlook-and-benchmarking/article/15752303/allison-q2-earnings-show-strength-in-defense-onhighway-outside-north-america
[2] https://www.tradingview.com/news/tradingview:89223e80cd07b:0-allison-transmission-q2-2025-financial-results/
[3] https://www.prnewswire.com/news-releases/allison-transmission-announces-second-quarter-2025-results-302521031.html