Allison Transmission Q3 Sales Rise 121.4% to $1.53 Billion, Guidance Raised Again
Allison Transmission raised its full-year guidance for the second straight quarter after third-quarter sales more than doubled with the addition of its newly acquired off-highway business. Net sales rose 121.4% to $1.53 billion from $693 million a year earlier, according to its 8-K.
Net income increased 39.4% to $191 million, or $2.30 a diluted share, from $137 million, or $1.63 a share. Adjusted diluted earnings rose 59.3% to $2.90 a share from $1.82. Adjusted EBITDA grew 56.3% to $400 million, a margin of 26.1% of sales.
The Indianapolis company bought Dana's off-highway drive and motion business on Jan. 1, and it now reports two units: Allison Transmission and Allison Off-Highway.
"Allison's third quarter results reflect continued strength across the majority of our end markets, supported by disciplined execution that maximized the benefits of higher volumes," Chair, President and Chief Executive Officer David Graziosi said.
Two business units
The legacy Allison Transmission unit posted record quarterly sales of $881 million, up 27.1% from $693 million, driven by demand for medium-duty and Class 8 vocational trucks. Its North America On-Highway end market had record revenue of $462 million. Segment operating profit was $300 million and adjusted EBITDA was $333 million, a 38% margin.
Allison Off-Highway contributed $653 million of sales, $32 million of segment operating profit and $83 million of adjusted EBITDA. Graziosi said mining demand stayed strong and construction grew in all regions, while industrial and agriculture demand remained subdued. The third quarter is seasonally the unit's softest, the company said.
Guidance raised
Allison raised its 2026 outlook from the guidance it issued Aug. 3:
- Net sales: $5.975 billion to $6.075 billion, from $5.8 billion to $6.0 billion
- Net income: $645 million to $685 million, from $600 million to $700 million
- Adjusted EBITDA: $1.53 billion to $1.58 billion, from $1.465 billion to $1.575 billion
- Adjusted free cash flow: $850 million to $900 million, from $745 million to $865 million
Capital spending is now expected at $240 million to $260 million, down from $260 million to $280 million.
Cash and capital returns
Operating cash flow rose 50.4% to $343 million from $228 million, and adjusted free cash flow rose 51.1% to $278 million from $184 million. Allison has repaid more than $400 million of debt this year and ended the quarter with total debt of $4.01 billion and net debt of $3.52 billion.
During the quarter, the company paid a dividend of $0.29 a share, totaling $23 million, and repurchased $57 million of stock, leaving $1.07 billion under its buyback authorization.
By the numbers
- Net sales: $1.53 billion, up 121.4%
- Diluted EPS: $2.30 vs. $1.63
- Adjusted EPS: $2.90, up 59.3%
- Adjusted EBITDA: $400 million, up 56.3%
- Adjusted free cash flow: $278 million
Sources
- Allison Transmission Form 8-K with third-quarter 2026 earnings release and investor presentation, filed Nov. 2, 2026 (accession 0001193125-26-443664)
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