Allison Transmission (ALSN) Q4 2024 earnings summary

Executive summary

• Achieved record full-year net sales of $3.2 billion, up 6% year-over-year, driven by strong North America On-highway and Defense demand, and growth in outside North America markets.

• Full-year diluted EPS reached a record $8.31, up 12% year-over-year.

• Fourth quarter net sales rose 3% year-over-year to $796 million, a quarterly record, with net income of $175 million and diluted EPS of $2.01.

• Returned over $250 million to shareholders via buybacks and increased dividends, and paid down $101 million in debt.

• Strong demand in Class 8 vocational vehicles and growth initiatives drove performance across multiple end markets.

Financial highlights

• Full year net income was $731 million; adjusted EBITDA was $1,165 million; adjusted free cash flow was $658 million.

• Q4 gross profit was $373 million, up $2 million year-over-year, mainly due to price increases, partially offset by higher manufacturing costs.

• Q4 net income was $175 million, up $5 million year-over-year, driven by lower SG&A and interest expenses.

• Q4 adjusted EBITDA was $270 million, down from $277 million in Q4 2023, mainly due to higher manufacturing expenses.

• Adjusted Free Cash Flow for Q4 was $136 million, down from $186 million in Q4 2023, due to lower operating cash flow and higher capex.

Outlook and guidance

• 2025 net sales expected between $3.2–$3.3 billion, targeting another record year, driven by price increases and strong vocational and defense demand.

• 2025 guidance: net income $735–$785 million, Adjusted EBITDA $1,170–$1,230 million, operating cash flow $800–$860 million, capex $165–$175 million, Adjusted Free Cash Flow $635–$685 million.

• Defense end market net sales expected to grow 18% in 2025; Global Off-Highway projected to decline 22%.

• 400 basis points of price realization expected across the business in 2025.

• Revenue growth expected from price increases, tracked vehicle demand, and robust North America vocational market.