Allison Transmission Holdings, Inc. has recently released its 10-K report, providing an in-depth look at its financial performance and operations. The company, founded in 1915 and headquartered in Indianapolis, Indiana, designs, manufactures, and sells fully automatic transmissions for medium and heavy-duty commercial vehicles, medium and heavy-tactical U.S. defense vehicles, and electrified propulsion systems worldwide. Additionally, it offers remanufactured transmissions under the ReTran brand name and sells branded replacement parts, support equipment, aluminum die-cast components, and other products necessary to service the installed base of vehicles utilizing its solutions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government.
In the 10-K report, Allison Transmission highlighted its financial performance for the year 2025, reporting net sales of $3,010 million, down 7% from the previous year. The breakdown of net sales by end market for 2025 and 2024 is as follows:
- North America On-Highway: $1,540 million in 2025, down 12% from 2024
- Outside North America On-Highway: $507 million in 2025, up 3% from 2024
- Global Off-Highway: $53 million in 2025, down 50% from 2024
- Defense: $267 million in 2025, up 26% from 2024
- Service Parts, Support Equipment, and Other: $643 million in 2025, down 3% from 2024
The company attributed the changes in net sales to various factors such as lower demand for medium-duty and class 8 vocational trucks in the North America On-Highway market, higher demand in Europe and South America in the Outside North America On-Highway market, and lower demand from the energy, mining, and construction sectors outside of North America in the Global Off-Highway market.
Allison Transmission also provided a breakdown of its key components of results of operations, revealing that direct material costs accounted for approximately 66% of total cost of sales, overhead costs for approximately 26%, and direct labor costs for approximately 8% in 2025.
Furthermore, the company discussed its use of non-GAAP financial measures such as Adjusted EBITDA and Adjusted free cash flow to measure operational profitability and evaluate cash flows. For the year ended December 31, 2025, Adjusted EBITDA was $1,130 million, representing 37.5% of net sales, while Adjusted free cash flow was $661 million.
The market has reacted to these announcements by moving the company's shares -1.21% to a price of $110.20. For more information, read the company's full 10-K submission here.
