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Sep 30, 2025
Allison Q3 2025 Earnings Report
Allison Transmission reported its third quarter 2025 financial results, with net sales of $693 million and diluted EPS of $1.63.
Key Takeaways
Allison Transmission experienced a challenging third quarter in 2025, with overall net sales decreasing to $693 million from $824 million in the prior year, primarily due to lower demand in the North America On-Highway market. Despite these headwinds, the company achieved a strong Adjusted EBITDA margin of 37% and generated significant cash flow, with net cash provided by operating activities at $228 million and adjusted free cash flow at $184 million.
Net sales for the third quarter of 2025 were $693 million, a decrease from $824 million in Q3 2024.
Diluted EPS for the quarter was $1.63, while net income stood at $137 million.
Adjusted EBITDA margin reached 37%, demonstrating operational efficiency despite a challenging demand environment.
The North America On-Highway segment saw a significant $130 million decrease in net sales, largely due to lower demand for Class 8 vocational and medium-duty trucks.
Revenue by Segment
Forward Guidance
Allison Transmission has revised its full-year 2025 guidance, expecting net sales between $2,975 million and $3,025 million, net income between $620 million and $650 million, and Adjusted EBITDA between $1,090 million and $1,125 million. The company also projects net cash provided by operating activities between $765 million and $795 million and adjusted free cash flow between $600 million and $620 million.
Positive Outlook
- Maintaining the midpoint of the implied Adjusted EBITDA margin guidance.
- Continued focus on operational excellence, quality, and customer service.
- Progress on closing the acquisition of Dana's Off-Highway business.
- Strong cash flow generation enabling continued investment in strategic initiatives.
- Repurchase of $27 million of common stock and $23 million of dividend payments during the third quarter.
Challenges Ahead
- North America On-Highway market negatively affected by global macroeconomic factors.
- Demand uncertainty and shifting customer behaviors in the largest end market.
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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