Allison Transmission(NYSE) ALSN

Allison Transmission Holdings, Inc. makes automatic gear systems for large vehicles and equipment. These products help trucks and buses operate more efficiently without manual gear shifts. Their systems also power heavy machinery used in construction, mining, and military operations.

What Drives the Business?

• Allison Transmission: Provides fully automatic transmissions for medium and heavy-duty trucks and buses; generated $860 million in net sales for the three months ended June 30, 2026.
• Allison Off-Highway: Supplies drivetrains and motion solutions for construction and agricultural machines; generated $706 million in net sales for the three months ended June 30, 2026.
• Defense Applications: Power systems for wheeled and tracked military vehicles; net sales in this category increased 57% year over year in the second quarter of 2026.
• Service and Parts: Sells branded replacement parts and support equipment to maintain its existing base of vehicles globally.

Strategic Moves and New Segments

• Completed the acquisition of Dana Incorporated's off-highway business on January 1, 2026, for a purchase price of approximately $2,628 million.
• Introduced the Allison Off-Highway Drive and Motion Systems segment to manage the newly acquired industrial product lines.
• Issued $500 million of senior notes due 2033 to help fund the Dana acquisition.
• Increased the capacity of its revolving credit facility to $1 billion in early 2026 to support liquidity.

The Global Support Network

The company operates through an independent global network of approximately 1,500 distributor and dealer locations. This extensive footprint provides technical support and replacement parts to customers across North America, Europe, Asia, South America, and Africa.

A Look at the Numbers

• Net sales reached $1,566 million for the three-month period ended June 30, 2026.
• Gross profit was $515 million in the quarter ended June 30, 2026, which was a 28% increase year over year.
• Adjusted EBITDA, a measure of profit before interest, taxes, and non-cash charges, was $404 million for the second quarter of 2026.
• Net cash provided by operating activities totaled $468 million for the six-month period ended June 30, 2026.
• Interest expense rose 145% to $54 million in the second quarter of 2026 following new borrowings for its recent acquisition.

Broadening the Industrial Footprint

Allison Transmission has evolved from a specialist in on-highway automatic transmissions into a broader industrial motion company. The addition of a major off-highway business has diversified its portfolio into construction, agriculture, and mining markets.