Allison Transmission Reports Slight Decline in Net Sales but Increase in Profitability for Q2 2025

Allison Transmission Holdings, Inc. reported its financial results for the second quarter and first half of 2025, revealing a slight decline in net sales and a modest increase in profitability. For the three months ended June 30, 2025, the company recorded net sales of $814 million, a decrease of 0.2% from $816 million in the same period of 2024. For the first half of 2025, net sales totaled $1.58 billion, down 1.6% from $1.605 billion year-over-year. Despite the decline in sales, net income increased to $195 million for the second quarter, compared to $187 million in 2024, and $387 million for the first half, up from $356 million in the prior year.

The company's gross profit for the second quarter rose to $402 million, reflecting a 2% increase from $394 million in the previous year, primarily driven by price increases on certain products and lower manufacturing expenses. Operating income for the quarter was $256 million, slightly down from $263 million in 2024. Selling, general, and administrative expenses increased significantly to $102 million, up 24% from $82 million, largely due to costs associated with a pending acquisition and higher warranty expenses.

Allison Transmission is in the process of acquiring Dana Incorporated's off-highway business for approximately $2.732 billion, a move expected to close in late 2025, pending regulatory approvals. To finance this acquisition, the company has secured a commitment for a $2 billion bridge loan. This strategic acquisition is anticipated to enhance Allison's market position and expand its product offerings in the off-highway sector.

Operationally, the company reported mixed performance across its end markets. North America On-Highway sales decreased by 9% due to lower demand for medium-duty trucks, while Defense sales surged by 47%, driven by increased demand for tracked vehicle applications. The company continues to maintain a strong liquidity position, with cash and cash equivalents totaling $778 million as of June 30, 2025, and $745 million available under its revolving credit facility.

Looking ahead, Allison Transmission anticipates continued challenges in the North American On-Highway market but expects growth in the Defense sector and price increases to offset some of the declines. The company remains focused on executing its strategic initiatives, including the integration of the Dana acquisition, which is expected to bolster its competitive edge in the propulsion solutions market.