Key Highlights

  • Net sales jumped 121% to $1,534 million in Q3 2026, with $653 million coming from Allison Off-Highway.
  • Profit reached $191 million; Diluted Earnings per Share were $2.30, while the adjusted figure rose 59% to $2.90.
  • Adjusted EBITDA came in at $400 million, a 56% rise, with a 26.1% margin.
  • Adjusted free Cash Flow of $278 million (up 51%) accompanied $343 million of operating cash flow.
  • Net sales guidance for the full year sits between $5.975 billion and $6.075 billion.

Transmission Unit Records and the Off-Highway Acquisition Lift Sales

Allison Transmission Holdings (NYSE:ALSN) reported third-quarter 2026 findings on Nov 2, 2026. Sales of $1,534 million represented a 121% increase, boosted by the Allison Off-Highway operation acquired on Jan 1, 2026, which contributed $653 million. The core transmission Business hit a quarterly peak of $881 million, a 27% gain, with all five end markets moving higher.

The firm builds fully automatic transmissions and drive systems used on work trucks, buses, military vehicles and industrial machines. North American on-highway Revenue hit $462 million, up 41%, powered by medium-duty and Class 8 Demand among work truck builders. Leaders said fleets are aging and buyers are responding to accumulated need, with strength expected into the fourth quarter and 2027.

Net Income Climbs to $191 Million as Off-Highway Dilutes the Margin

Net income rose $54 million to $191 million, equal to 12.5% of sales, while diluted EPS of $2.30 compares with $1.63, a 41% increase. Adjusted Net Income totaled $241 million. Gross Profit reached $505 million, a 33% margin, and net interest expense grew to $51 million, up from $24 million.

Adjusted EBITDA climbed to $400 million from a prior-year $256 million, though its Margin sits at 26.1% against 36.9% because the acquired unit runs at a lower margin structure. The core segment generated $333 million of adjusted EBITDA, a 38% margin, while Off-Highway contributed $83 million at 13%.

Off-Highway's segment operating profit was $32 million. Mining performed well, and construction plus material handling expanded across all regions, whereas industrial and agricultural demand remained muted. The quarter was seasonally weakest on European holidays, and a $17 million restructuring charge followed from reshaping that footprint.

Operating Cash Pays for Debt Reduction, a Dividend and Share Repurchases

Cash from operations expanded 50%, reaching $343 million, while free cash flow on an adjusted basis rose 51% to $278 million. Nine-month Operating Cash Flow reached $811 million.

Allison finished with $497 million of cash on hand and $996 million of undrawn revolver room, while gross borrowings stood at $4,012 million and net borrowings at $3,515 million. So far this year it has retired more than $400 million of borrowings, partly through $100 million taken out of its 2027 notes early.

Quarterly payouts totaled $23 million, equal to $0.29 a share, and $57 million went to repurchases, with $1,068 million still authorized. Management flagged steel and aluminum as raw-material pressure, though pricing stayed ahead of costs.

Updated 2026 Ranges Center on $5.975 Billion to $6.075 Billion in Net Sales

The 2026 outlook now runs $5.975 billion to $6.075 billion for sales, with $645 million to $685 million of net income, and adjusted EBITDA between $1,530 million and $1,580 million. Cash from operations should fall between $1,110 million and $1,140 million, while adjusted free cash flow lands between $850 million and $900 million.

Profit guidance accounts for close to $125 million of pre-tax, non-recurring costs at Off-Highway. The deal is expected to be accretive in 2026 and price-cost positive in 2027. The 10-Q follows later this week.