Allison Transmission (ALSN) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales declined 3% year-over-year to $766 million, with strong North America On-Highway and Defense markets offsetting declines in Global Off-Highway and Service Parts.

• Net income rose 14% year-over-year to $192 million, driven by price increases, lower costs, and absence of prior year UAW incentives.

• Diluted EPS increased 17% to $2.23, reflecting higher net income and fewer shares outstanding.

• Adjusted EBITDA margin improved by 90 basis points to 37.5%.

• Over $150 million in common stock was repurchased in Q1 2025, with $1.4 billion remaining authorized.

Financial highlights

• Gross profit increased to $378 million, up 3% year-over-year, with margin improvement due to price increases and lower costs.

• Operating income rose to $249 million, up from $204 million in Q1 2024.

• Net cash from operating activities was $181 million, up from $173 million in Q1 2024.

• Adjusted free cash flow was $155 million for the quarter.

• Capital expenditures for Q1 2025 were $26 million, up 136% due to timing.

Outlook and guidance

• Full-year 2025 guidance reaffirmed: net sales $3.2–$3.3 billion, net income $735–$785 million, adjusted EBITDA $1.17–$1.23 billion.

• Net cash from operations expected at $800–$860 million; adjusted free cash flow $635–$685 million; capital expenditures $165–$175 million.

• Guidance reflects record revenue expectations, price increases, and strong North American vocational and Defense demand.