Director Product Management

Allison Transmission Holdings reported second quarter 2026 net sales of $1,566 million, with an adjusted EBITDA margin of 26% and net cash from operating activities of $312 million. The quarter included results from the newly acquired Allison Off-Highway business unit, which contributed $706 million in net sales. The company's legacy transmission business achieved record quarterly net sales of $860 million, driven by growth in defence and North American truck markets. Adjusted free cash flow reached a record $281 million. During the quarter, Allison repurchased $46 million of common stock, paid dividends, and repaid $150 million under its revolving credit facility. The company raised its full-year 2026 guidance, now expecting consolidated net sales between $5,800 million and $6,000 million, with adjusted EBITDA ranging from $1,465 million to $1,575 million.

Allison Transmission Q2 earnings call highlights. August 3, 2026 Key points. * Allison Transmission reported strong second-quarter results, with sales up 92% year over year to $1.566 billion, adjusted EBITDA of $404 million and record adjusted free cash flow of $281 million. The company raised its 2026 outlook, including sales guidance of $5.8 billion to $6 billion. * Legacy transmission revenue reached a quarterly record, supported by 57% growth in defense sales, while the Off-Highway unit saw recovery in construction, material handling and mining. Allison also secured more than $50 million in annual run-rate off-highway awards and major defense contracts supporting long-term demand. * The company continues integrating the Off-Highway acquisition and targets $120 million in annual run-rate synergies by 2029. During the quarter, it repaid $150 million of debt, repurchased $46 million of stock and paid a $0.29-per-share dividend. * Five stocks we like better than Allison Transmission. Allison Transmission NYSE: ALSN reported second-quarter 2026 net sales of $1.566 billion, up 92% from a year earlier, as the addition of its Allison Off-Highway business unit and growth in its legacy transmission operations lifted revenue. The company raised its full-year outlook, citing second-quarter performance and improving conditions across its end markets. Adjusted EBITDA rose by $91 million year over year to $404 million, representing a 25.8% margin, while adjusted diluted earnings per share increased 8% to $2.73. Record quarterly adjusted free cash flow grew 84% to $281 million, Chief Financial Officer and Treasurer Scott Mell said. "Cash generation remained exceptionally strong in the second quarter," Mell said, adding that the company generated cash despite higher steel and aluminum costs and broader inflationary pressure. Allison expects to recover a substantial portion of higher commodity costs from customers through existing mechanisms, though the recovery occurs with a six- to 12-month lag. Legacy transmission sales reach quarterly record. Revenue in the Allison Transmission business unit increased 6% from a year earlier to a quarterly record of $860 million. Defense was a major contributor, with revenue in that end market rising 57% year over year to nearly $100 million. North American on-highway revenue increased 3%, driven primarily by pricing as volumes rose only slightly. Chief Operating Officer Fred Bohley said North American on-highway revenue was up 15% sequentially in the second quarter, while all end markets in the transmission business unit increased more than 10% sequentially. The company expects further sequential improvement in medium-duty and Class 8 vocational truck volumes during the second half of 2026. Management said end-user purchasing decisions remain influenced by geopolitical conditions, tariffs and emissions regulations. Chairman, President and CEO David Graziosi said OEMs and their suppliers are still assessing the Environmental Protection Agency's proposal related to 2027 emissions requirements. He said the availability of 2026 engines is expected to help mitigate the effects of the proposed changes. On pricing, Bohley said Allison has secured meaningful pricing since the pandemic and expects commercial pricing in 2027 to exceed the 50- to 75-basis-point annual pricing level the company historically achieved before the pandemic. He distinguished those commercial pricing expectations from commodity pass-through mechanisms. Off-Highway business sees demand recovery in several markets. The Allison Off-Highway business unit generated $706 million in second-quarter revenue. Management said construction, material handling and mining markets posted strong year-over-year growth as demand rebounded from trough levels. Mining remained supported by elevated commodity prices. Agriculture showed signs of recovery in certain segments and regions but had not yet turned positive overall, according to Graziosi. Europe performed well year over year, particularly in construction and material handling, while Asia-Pacific and India grew across all end markets. Revenue in the Americas declined year over year, primarily because of construction, material handling and agriculture markets. Craig Price, president and business unit leader of Allison Off-Highway, said the unit's third quarter is typically its weakest revenue period because nearly half of its business comes from Europe, where seasonal shutdowns affect operations. The fourth quarter is expected to improve from the third quarter but remain below first-half levels because of year-end holidays. Price said pricing was not meaningfully higher or lower year over year in the off-highway business. Mell said the business has less material-cost volatility than the transmission unit because it can pass higher costs through more quickly. Allison said its off-highway team secured program awards during the first half representing more than $50 million of annual run-rate net new business across construction, material handling, mining and agriculture. Defense awards support long-term outlook. Allison highlighted three defense program wins, including selection of its 4500 Specialty Series fully automatic transmission for the French Land Forces' PL6T tactical truck program, which is expected to support more than 7,000 vehicles over the next decade. The company also secured a $250 million contract with BAE Systems Hägglunds to supply its new 4040MX cross-drive transmission for the CV90 Mark 4 infantry fighting vehicle. Allison described the contract as its largest tracked-defense order and the inaugural production application for the 4040MX product. In addition, General Dynamics European Land Systems ordered Allison 2500 Specialty Series transmissions for EAGLE Series armored vehicles. Deliveries are expected to begin in 2027, with the order covering about 3,000 vehicles and including an option for up to 2,000 additional units. Bohley said defense revenue was up about 60% year to date and that the company has strong visibility for the balance of 2026, with second-half results expected to resemble the first half. He said the company's 2027 defense order board is largely full and described Allison's outlook for the market as bullish. Synergy plan and raised 2026 guidance. Allison continues to target $120 million in annual run-rate synergies from integrating the off-highway business. Procurement and logistics initiatives account for 60% of the target, while manufacturing and footprint optimization represent 20%. Corporate-function integration and organizational efficiency initiatives make up the remaining 20%. The company expects to realize about 40% of the target by the end of 2027, another 40% by the end of 2028 and the full amount by the end of 2029. Mell said no material synergies are included in the updated 2026 EBITDA outlook. For full-year 2026, Allison now expects: * Net sales of $5.8 billion to $6 billion. * Net income of $600 million to $700 million, subject to completion of purchase price accounting for the off-highway acquisition. * Adjusted EBITDA of $1.465 billion to $1.575 billion. * Operating cash flow of $1.025 billion to $1.125 billion. * Adjusted free cash flow of $745 million to $865 million. The net-income outlook includes about $140 million in one-time pretax separation, integration and restructuring costs associated with the off-highway business, including roughly $75 million related to stepped-up inventory basis. Allison said it still expects the acquisition to be accretive to net income and earnings per share in 2026. During the quarter, the company repaid the remaining $150 million outstanding on its revolving credit facility, repurchased $46 million of common stock and paid a quarterly dividend of $0.29 per share. About Allison Transmission (NYSE:ALSN). Allison Transmission Holdings Inc is a global designer, manufacturer and seller of fully automatic transmissions and hybrid propulsion systems for commercial duty vehicles and off-highway equipment. The company's products are engineered to improve fuel efficiency, reduce emissions and enhance performance across a broad range of industries. Allison's core transmission portfolio serves applications such as on-highway trucks and buses, medium- and heavy-duty commercial vehicles, and military ground vehicles. In addition to conventional automatic transmissions, Allison offers advanced hybrid systems that integrate electric motors with mechanical transmission components. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. Before you consider Allison Transmission, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Allison Transmission wasn't on the list. While Allison Transmission currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys. Discover the 10 Best High-Yield Dividend Stocks for 2026 and secure reliable income in uncertain markets. Download the report now to identify top dividend payers and avoid common yield traps.