ALSN Filings — Allison Transmission Holdings, Inc. - FilingSpy
ALSN
Allison Transmission Holdings, Inc.
A maker of fully automatic transmissions for medium- and heavy-duty commercial vehicles and U.S. defense tactical trucks, Allison builds the gearboxes that power buses, delivery fleets, and military vehicles around the world. It traces its roots to 1915, when Indianapolis racing enthusiast James Allison founded the Speedway Team Company to maintain his race cars at the Indianapolis 500 he helped create; after his death, General Motors bought the firm and it later became the independent Allison Transmission. Its transmissions are known for smooth, fuel-efficient shifting in stop-and-go work, and it is also developing electric propulsion systems under the eGen Flex and eGen Power names.
Allison Transmission's Q2 revenue nearly doubles on acquisition, but gross margin halves to 32.9% on lower-margin mix and purchase accounting.
The acquisition of Dana's off-highway business reshaped Allison Transmission's income statement in a single quarter. rose 92% to $1.57 billion, but contracted 16.6 points to 32.9% as the lower-margin acquired business and $18 million in weighed on profitability, while fell 7% to $181 million. The company is now a materially different business, carrying $4.1 billion in and a margin profile that will take quarters to clarify as charges roll off.
Key takeaways
rose 92% to $1,566 million, driven by the addition of the Allison Off-Highway , which contributed $706 million in its first full quarter after the January 1, 2026 acquisition close.
fell 16.6 points to 32.9%, primarily because the acquired off-highway business carries a lower margin profile and the quarter included $18 million in non-cash from .
Legacy Allison Transmission grew 6% to $860 million, led by a 57% increase in Defense net sales to $99 million on higher Tracked vehicle demand and price increases.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 92% to $1,566M driven by the Dana off-highway acquisition, while GAAP net income fell 7% to $181M on higher costs and interest.
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Consolidated increased 92% to $1,566M, with the new Allison Off-Highway contributing $706M and legacy Allison Transmission growing 6% to $860M.
Allison Transmission growth was led by a 57% surge in Defense to $99M, driven by Tracked vehicle demand and price increases.
more than doubled to $54 million, reflecting the new debt taken on to fund the acquisition — a $1.2 billion incremental term loan and $500 million in 5.875% Senior Notes.
rose 14% to $291 million, but fell 12.9 points to 18.6% as selling, general and administrative expenses and of acquired intangibles increased with the larger combined business.
rose 84% to $281 million, supported by of $312 million, while cash and equivalents stood at $399 million with $995 million available under the .
What changed
The Q1 2026 watch item on recovery is partially answered: gross margin improved 4.0 points sequentially from 28.9% to 32.9%, but the $63 million step-up charge that depressed Q1 was replaced by $18 million in , so the underlying margin of the combined business remains obscured by .
The North America On-Highway trajectory flagged in Q1 2026: legacy North America On-Highway sales fell 14% in Q1; the Q2 filing does not break out the legacy 's North America On-Highway performance separately, but total Allison Transmission segment grew 6%, suggesting the decline may have moderated or been offset by other end markets.
The FY 2025 watch item on Defense sustaining its growth: Defense rose 57% in Q2 2026 to $99 million, extending the growth trajectory that began in 2024 and marking a third consecutive year of expansion after the 2022 decline.
The Q1 2026 watch item on debt financing: declined 3.6% sequentially to $4.094 billion from $4.247 billion, but the filing does not disclose new permanent financing or refinancing activity beyond the existing facilities.
What to watch
Whether continues to improve in Q3 2026 as charges diminish, and what the underlying run-rate margin of the combined business looks like once non-cash items fully roll off.
The trajectory of legacy North America On-Highway sales, which fell 14% in Q1 2026 — whether Q2 data, when disclosed in detail, shows stabilization or further decline in the company's largest legacy end market.
Integration execution and any restructuring costs or synergy realization in the acquired off-highway business, which added approximately 46 manufacturing plants and 8,000 employees.
The pace and terms of any refinancing of the $4.1 billion debt load, and the resulting trajectory now that the acquisition is fully reflected in the capital structure.
contracted from 50% to 33% primarily due to the lower-margin profile of the acquired off-highway business and $18M in stepped-up .
, net more than doubled to $54M, reflecting new debt from the acquisition including a $1,200M Incremental Term Loan and $500M in 5.875% Senior Notes.
rose 84% to $281M for the quarter, supported by higher of $312M.
Liquidity remained strong with $399M in cash and $995M available under the as of June 30, 2026.
Quantitative and Qualitative Disclosures About Market Risk
The company faces interest-rate, foreign-currency, and commodity-price risks, partially mitigated by hedging euro exposure and passing through some commodity costs to customers.
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Interest-rate risk arises from variable-rate borrowings under the Senior Secured ; a 12.5-basis-point rate change on a fully drawn facility would affect annual by approximately $3 million.
Foreign-currency risk stems from global operations and foreign subsidiaries; the company uses cross-currency swaps to hedge $1,000 million of euro net investment exposure and plans to expand its use of foreign currency forward contracts.
Commodity-price risk is driven by purchased components, which represent 64% of cost of sales, with a substantial portion made of aluminum, steel, and iron.
Aluminum part costs include an industry-index-based adjustment factor, and many iron- and steel-based contracts also contain index-based components.
The company passes through a portion of commodity price changes to certain customers via long-term agreements and historically has not used long-term purchase contracts for aluminum, steel, or iron.
From time to time, we are a party to various legal actions in the normal course of our business, including those related to commercial transactions, product liability, personal injury and workers’ compensation, safety, health, taxes, environmental and other matters. Information…
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From time to time, we are a party to various legal actions in the normal course of our business, including those related to commercial transactions, product liability, personal injury and workers’ compensation, safety, health, taxes, environmental and other matters. Information pertaining to legal proceedings can be found in "Note Q. Commitments and Contingencies” in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.
There have been no material changes from our risk factors as previously reported in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on February 24, 2026.
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There have been no material changes from our risk factors as previously reported in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on February 24, 2026.