Allison Transmission’s Strong Q2 and Strategic Acquisition

Allison Transmission ( (ALSN) ) has released its Q2 earnings. Here is a breakdown of the information Allison Transmission presented to its investors.

Allison Transmission, a leading designer and manufacturer of propulsion solutions for commercial and defense vehicles, is renowned for its fully automatic transmissions used in a variety of applications worldwide. The company operates in the automotive and defense sectors, with a significant global presence.

In its second quarter of 2025, Allison Transmission reported net sales of $814 million, driven by strong performance in the Defense and Outside North America On-Highway markets. The company also announced a significant acquisition of Dana Incorporated’s Off-Highway business, valued at approximately $2.7 billion, expected to close by the end of the year.

Key financial highlights include a net income of $195 million, a 4% increase year over year, and a record diluted EPS of $2.29, up 8% from the previous year. The adjusted EBITDA margin improved to 38.5%, reflecting a 160 basis point increase. Notably, the Defense end market saw a $20 million increase in net sales, while the Outside North America On-Highway market achieved record sales.

Despite a $39 million decrease in the North America On-Highway market, Allison’s strategic acquisition and focus on operational efficiencies position the company to navigate current trade uncertainties. The company repurchased over 1% of its outstanding shares during the quarter, highlighting its commitment to capital allocation priorities.

Looking ahead, Allison Transmission maintains a positive outlook, with revised full-year 2025 guidance reflecting anticipated acquisition-related expenses and favorable tax impacts. The company expects net sales between $3,075 and $3,175 million, with a continued focus on aligning costs with market developments and pursuing growth opportunities.