Allison Transmission Holdings, Inc.

Allison Transmission Holdings, Inc. (NYSE: ALSN) supplies automatic transmissions for commercial and defense vehicles, as well as off-highway drive and motion systems. It serves truck, mining, construction, agriculture and industrial markets.

A larger company after the Dana deal

Allison completed its acquisition of Dana's Off-Highway business on January 1, 2026. The final purchase price was $2.628 billion. Funding combined existing cash with bonds, a term loan and revolving borrowing. The revolving borrowing drawn for the deal was repaid during the first half.

The enlarged company reports the legacy Allison Transmission business and the acquired Allison Off-Highway business separately, with central costs reported outside both segments.

September-quarter results

Amounts are USD millions for the three months ended September 30. GAAP figures include the acquired unit from January 2026; the 2025 comparison does not. Adjusted free cash flow is operating cash flow less additions of long-lived assets.

Adjusted net income removes accounting charges that spread acquired-asset costs over time, acquisition-related asset charges, specified deal costs, stock compensation and restructuring charges, with tax effects. Interest expense remains included.

North American On-Highway sales rose from $327 million to $462 million. The comparable 2024 quarter was $457 million, putting the latest rebound just above the level before the 2025 decline. Management cited higher truck demand and pricing. The legacy unit's operating margin was about 34%, compared with about 5% at the acquired unit, before central costs.

Annual forecasts and progress

On November 2, Allison raised its 2026 sales range to $5.975 billion to $6.075 billion from $5.8 billion to $6.0 billion in August. The net-income range narrowed to $645 million to $685 million from $600 million to $700 million. Its midpoint rose, while the upper end fell.

Operating cash flow guidance increased to $1.110 billion to $1.140 billion from $1.025 billion to $1.125 billion. Capital spending is now expected at $240 million to $260 million, down from $260 million to $280 million. Together those revisions raise adjusted free cash flow guidance to $850 million to $900 million from $745 million to $865 million.

For the first nine months, operating cash flow was $811 million, versus $593 million, while net income fell to $484 million from $524 million.

Borrowing and integration

At September 30, cash was $497 million and the carrying amount of current and long-term debt totaled $4.012 billion, giving net debt of $3.515 billion. Debt remained above the $2.890 billion recorded at December 2025 after financing the acquisition.

The company repaid more than $400 million of debt during the first nine months, including $100 million of debt in the third quarter. Third-quarter share repurchases were $57 million and dividends $23 million.

The next results can test whether the truck recovery and integration of Off-Highway support the higher cash forecast. Agriculture and industrial demand remain weak in the acquired unit, according to management.