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Jun 30, 2025
Allison Q2 2025 Earnings Report
Allison Transmission reported its second quarter 2025 results, highlighting increased net income and diluted EPS, driven by strong performance in Defense and Outside North America On-Highway end markets, despite incurring one-time acquisition-related costs.
Key Takeaways
Allison Transmission announced strong second quarter 2025 results with net income up 4% year over year to $195 million and diluted EPS reaching a record $2.29, an 8% increase. The company's net sales were $814 million, with growth in Defense and Outside North America On-Highway segments, partially offset by declines in North America On-Highway and Global Off-Highway.
Net Income increased by 4% year over year to $195 million, representing 24% of Net Sales.
Diluted EPS reached a record $2.29, an 8% increase compared to the prior year.
Adjusted EBITDA margin improved to 38.5%, up 160 basis points year over year.
The company announced a definitive agreement to acquire Dana Incorporated's Off-Highway business for approximately $2.7 billion, expected to close in late Q4 2025.
Revenue by Segment
Forward Guidance
Allison Transmission revised its full-year 2025 guidance, expecting net sales between $3,075 million and $3,175 million, net income between $640 million and $680 million, and Adjusted EBITDA between $1,130 million and $1,180 million. The company also anticipates net cash provided by operating activities between $785 million and $835 million and Adjusted free cash flow between $620 million and $660 million.
Positive Outlook
- Anticipated favorable cash income tax impacts from the recently passed One Big Beautiful Bill Act.
- Maintaining the midpoint of the implied Adjusted EBITDA margin guidance.
- Expected strong net cash provided by operating activities, ranging from $785 million to $835 million.
- Projected Adjusted free cash flow between $620 million and $660 million.
- Continued focus on operational efficiencies and alignment of costs with end market developments.
Challenges Ahead
- Current end market conditions are impacting the outlook.
- Anticipated acquisition-related expenses will affect financial results.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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