Allison Transmission (ALSN) Q3 2026 earnings summary

Executive summary

• Q3 net sales rose 121% YoY to $1.534B, including $653M from the Off-Highway business acquired Jan. 1, 2026; Transmission sales set a quarterly record at $881M, up 27%.

• Adjusted EBITDA reached $400M, up 56%, and adjusted diluted EPS was $2.90, up 59%; acquisition mix lowered consolidated gross and adjusted EBITDA margins.

Financial highlights

• Net income was $191M versus $137M; diluted EPS was $2.30 versus $1.63. Adjusted net income was $241M versus $153M.

• Consolidated gross profit was $505M, with a 32.9% gross margin; operating income was $304M, or 19.8% of sales.

• Net cash from operating activities was $343M versus $228M; adjusted free cash flow was $278M versus $184M, up 51% YoY.

• Nine-month net sales were $4.506B, operating income $790M, net income $484M and adjusted EBITDA $1.166B; adjusted free cash flow was $662M.

Outlook and guidance

• FY2026 net sales guidance rose to $5.975B–$6.075B from $5.8B–$6.0B; net income guidance is $645M–$685M, subject to purchase price accounting.

• FY2026 adjusted EBITDA guidance is $1.53B–$1.58B; operating cash flow is $1.11B–$1.14B and adjusted free cash flow is $850M–$900M.

• Capex guidance declined to $240M–$260M, including ~$20M of one-time separation and integration spending; operating cash flow guidance includes ~$60M of one-time acquisition-related cash outlays.

• Management expects 2027 demand momentum, positive price-cost, continued synergies and margin growth; commodity-cost stabilization and agricultural recovery could add upside.

• Medium-duty demand is expected to strengthen into Q4 and 2027; Class 8 vocational demand remains robust, while Off-Highway Q4 margins typically improve from Q3 seasonality.