Allison Transmission sales jump 84% following off-highway acquisition
Consolidated net sales reached $1,406 million in the first quarter, driven by the integration of a new business unit.
Allison Transmission Holdings (ALSN), the manufacturer of propulsion systems, reported first-quarter net sales of $1,406 million, an 84% increase year-over-year.
The growth followed the company's acquisition of the Allison Off-Highway business unit on January 1, 2026. While the acquisition expanded the company's top line, the integration process weighed on bottom-line results and margins during the period.
Consolidated adjusted EBITDA rose 22% year-over-year to $362 million. However, the adjusted EBITDA margin compressed to 26%, down from 38.6% in the first quarter of 2025. Net income decreased to $112 million from $192 million in the prior-year period, which the company attributed to acquisition costs, higher interest expense, and lower income tax expense.
The newly acquired Allison Off-Highway business unit contributed $673 million in net sales and $98 million in adjusted EBITDA, representing a 15% margin. The unit reported a GAAP segment operating loss of $21 million.
Performance in the legacy Allison Transmission business unit declined. Net sales for the segment fell 4% year-over-year to $733 million. Gross profit for the legacy business dropped $22 million to $356 million, as lower volumes and unfavorable direct material costs outweighed the impact of price increases.
Allison reaffirmed its full-year 2026 guidance, projecting consolidated net sales between $5,575 million and $5,925 million and consolidated adjusted EBITDA between $1,365 million and $1,515 million.
The company updated its 2026 net income guidance to account for more than $100 million in one-time pre-tax expenses for the separation, integration, and restructuring of the Off-Highway business, up from an earlier estimate of $70 million.
On June 11, 2026, the company completed a repricing of its $508 million term loan due 2031. The move reduced the interest rate margin by 25 basis points and is expected to lower annual cash interest expense by approximately $1.3 million.