Operating cash flow ran at 1.80 times net income in 2026Q3 with free cash flow of $278.0M, though quarterly working capital swings of up to $58M suggest this conversion may not persist.
Allison Transmission Holdings, Inc. (ALSN) cash flow statement — 15-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 |
|---|
| Cash from Operations | 1.05B | 824M | 801M | 784M | 657M | 635M | 561M | 847M | 837M | 658M | 590.8M | 563.8M | 556.9M | 453.5M | 497.5M | 469.2M |
| Operating CF Margin % | - | 27.38% | 24.84% | 25.83% | 23.73% | 26.44% | 26.96% | 31.39% | 30.85% | 29.09% | 32.11% | 28.39% | 26.18% | 23.54% | 23.23% | 21.69% |
| Operating CF Growth % | 118.51% | 2.87% | 2.17% | 19.33% | 3.46% | 13.19% | -33.77% | 1.19% | 27.2% | 11.37% | 4.79% | 1.24% | 22.8% | -8.84% | 6.03% | - |
| Net Income | 583M | 623M | 731M | 673M | 531M | 442M | 299M | 604M | 639M | 504M | 214.9M | 182.3M | 228.6M | 165.4M | 514.2M | 103M |
| Depreciation & Amortization | 275M | 124M | 121M | 154M | 155M | 150M | 148M | 167M | 164M | 170M | 176M | 185.4M | 192.6M | 204M | 252.5M | 255.7M |
| Stock-Based Compensation | 25M | 0 | 26M | 22M | 18M | 14M | 17M | 13M | 13M | 12M | 9.4M | 9.8M | 14.7M | 13.7M | 6.4M | 8M |
| Deferred Taxes | 15M | 64M | -17M | -17M | -4M | 64M | 69M | 65M | 52M | -50M | 114.2M | 96M | 131.8M | 98M | -303.8M | 39.8M |
| Other Non-Cash Items | 60M | 40M | 17M | 3M | 28M | -3M | 26M | 13M | 17M | 25M | 12.3M | 106.3M | -14.5M | -37.7M | 21.6M | 97.5M |
| Working Capital Changes | 90M | -27M | -77M | -51M | -71M | -32M | 2M | -15M | -48M | -3M | 64M | -16M | 3.7M | 10.1M | 6.6M | -34.8M |
| Change in Receivables | -203M | 34M | -8M | 7M | -70M | -78M | 28M | 37M | -61M | -19M | -3M | 9M | -35.8M | -9.9M | 29.9M | -25M |
| Change in Inventory | 29M | 3M | -44M | -52M | -25M | -26M | 21M | -11M | -18M | -25M | 15M | -2M | 12.7M | -4.4M | -1.8M | -11M |
| Change in Payables | 209M | -36M | 1M | 21M | 15M | 24M | -4M | -25M | 9M | 30M | 2M | -25.1M | 2.1M | 17.6M | -29.4M | 24.9M |
| Cash from Investing | -2.75B | -184M | -147M | -129M | -183M | -212M | -111M | -405M | -103M | -94M | -71.4M | -59.7M | -67.9M | -81.5M | -138.7M | -55.9M |
| Capital Expenditures | -223M | -175M | -143M | -125M | -167M | -175M | -115M | -172M | -100M | -91M | -70.6M | -58.1M | -64.1M | -74.4M | -123.9M | -96.9M |
| CapEx % of Revenue | 4.92% | 5.81% | 4.43% | 4.12% | 6.03% | 7.29% | 5.53% | 6.38% | 3.69% | 4.02% | 3.84% | 2.93% | 3.01% | 3.86% | 5.78% | 4.48% |
| Acquisitions | -2.53B | 0 | -6M | 0 | -24M | 212M | 4M | -232M | 0 | 0 | 200K | 300K | 0 | 0 | 0 | 2.4M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 4M | 0 | 4M | 0 | 3M | -212M | 0 | -172M | 0 | 0 | 0 | 0 | 300K | 500K | 600K | 0 |
| Cash from Financing | 1.3B | 69M | -427M | -332M | -367M | -604M | -335M | -480M | -700M | -574M | -564.7M | -528.7M | -424.1M | -277.5M | -593.5M | -369.9M |
| Debt Issued (Net) | 1.59B | 495M | -104M | -7M | -7M | -7M | -19M | -3M | -28M | 388M | -215M | -137M | -157.6M | -142.4M | -574.8M | -369.9M |
| Equity Issued (Net) | -155M | -320M | -254M | -235M | -282M | -510M | -223M | -388M | -609M | -866M | -232.5M | -282.9M | -190.2M | -53.2M | 29M | 0 |
| Dividends Paid | -94M | -91M | -87M | -83M | -80M | -81M | -78M | -73M | -80M | -89M | -100.6M | -105.6M | -91.6M | -77.1M | -32.8M | 0 |
| Share Repurchases | -169M | -328M | -254M | -270M | -278M | -513M | -225M | -393M | -609M | -885M | -256.2M | -305.8M | -249.8M | -99.5M | 0 | 0 |
| Other Financing | -41M | -15M | 18M | -7M | 2M | -6M | -15M | -16M | 17M | -7M | -16.6M | -3.2M | 15.3M | -4.8M | -14.9M | 0 |
| Net Change in Cash | -405M | 714M | 226M | 323M | 105M | -183M | 118M | -39M | 32M | -6M | -46.9M | -11.4M | 78.3M | 104.5M | -233.8M | 61.8M |
| Free Cash Flow | 825M | 649M | 658M | 659M | 490M | 460M | 446M | 675M | 737M | 567M | 520.2M | 505.7M | 492.8M | 379.1M | 373.6M | 372.3M |
| FCF Margin % | 18.18% | 21.56% | 20.4% | 21.71% | 17.7% | 19.15% | 21.43% | 25.02% | 27.17% | 25.07% | 28.27% | 25.47% | 23.16% | 19.68% | 17.44% | 17.21% |
| FCF Growth % | 20.44% | -1.37% | -0.15% | 34.49% | 6.52% | 3.14% | -33.93% | -8.41% | 29.98% | 9% | 2.87% | 2.62% | 29.99% | 1.47% | 0.35% | - |
| FCF per Share | 9.82 | 7.64 | 7.48 | 7.24 | 5.10 | 4.30 | 3.91 | 5.49 | 5.51 | 3.78 | 3.07 | 2.86 | 2.69 | 2.02 | 2.01 | 2.05 |
| FCF Conversion (FCF/Net Income) | 1.42x | 1.32x | 1.10x | 1.16x | 1.24x | 1.44x | 1.88x | 1.40x | 1.31x | 1.31x | 2.75x | 3.10x | 2.44x | 2.74x | 0.97x | 4.56x |
| Interest Paid | 152M | 0 | 124M | 131M | 117M | 103M | 136M | 125M | 115M | 124M | 78M | 97M | 140M | 159.2M | 167.3M | 208.6M |
| Taxes Paid | 143M | 0 | 190M | 194M | 102M | 60M | 26M | 89M | 101M | 96M | 13M | 5M | 5M | 3.8M | 10.7M | 5.8M |
Quick answers to the most common questions about buying ALSN stock.
Allison Transmission Holdings, Inc. (ALSN) generated $824.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Allison Transmission Holdings, Inc. (ALSN) generated $649.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Allison Transmission Holdings, Inc. (ALSN) spent $175.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Allison Transmission Holdings, Inc. (ALSN) returned $91.0M to shareholders via cash dividends and spent $328.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Leverage amid cyclical recovery
Metrics are mathematically derived from official filings.
Operating Cash Flow Outpacing Reported Earnings
Based on ALSN's reported cash flow statements, operating cash flow ran at 1.80 times net income in 2026Q3 and 1.72 times in 2026Q2, a conversion ratio that appears to reflect non-cash charges and working capital releases rather than structurally higher underlying cash generation.
The gap between net income and operating cash flow is the most material signal in this dataset, and the recent quarters show it widening well above 1.0x. Conversion was far weaker through 2024 and 2025, with several quarters near 0.9x, suggesting earnings quality has been uneven across the cycle. Investors should monitor whether the current elevated conversion is sustained or reflects timing benefits that could reverse.
Free Cash Flow Rebuilding From Trough Levels
According to reported quarterly figures, ALSN's free cash flow margin reached 32.7% in 2026Q2 and 18.1% in 2026Q3, compared with single-digit margins in 2024Q2 and 2026Q1, indicating a recovery in cash generation that remains quarter-dependent.
Free cash flow has moved from a weak 7.3% margin in 2026Q1 to much stronger levels, but the trajectory is lumpy and sensitive to working capital swings. The 2026Q3 margin of 18.1% sits below the prior quarter, which may indicate that the Q2 peak was partly driven by timing rather than run-rate improvement. Investors should treat the trailing average as a more reliable guide than any single quarter.
Light Capital Intensity Despite EV Investment
As reported in financial statements, ALSN's capital expenditures have typically run between 2.6% and 10.0% of revenue, with the highest intensity in 2025Q4 and 2024Q4, a range that appears elevated during periods of product development spending.
CapEx intensity has been modest on average, consistent with an asset base that is largely mature, yet the spikes in late 2024 and 2025 may reflect electrification and eGen Power platform investment. Depreciation and amortization of roughly $30M to $85M per quarter suggests the company is replacing its asset base at a pace that does not yet require heavy reinvestment. Whether current CapEx levels are adequate for a transition to electric drivetrains remains an open question warranting further investigation.
Working Capital Swings Drive Quarterly Noise
Based on ALSN's reported figures, working capital changes ranged from a $58M outflow in 2024Q2 to a $56M inflow in 2025Q4 and a $53M outflow in 2026Q1, indicating that quarterly cash flow is substantially influenced by inventory and receivables timing.
The magnitude of these swings relative to quarterly operating cash flow suggests that reported conversion ratios can shift materially without any change in underlying profitability. The 2026Q1 outflow coincided with the weakest free cash flow margin in the period, which may point to inventory build ahead of demand recovery. Investors should monitor whether working capital normalizes as revenue stabilizes.
Buybacks Dominating Capital Returns
According to reported cash flow statements, ALSN directed roughly $31M to $150M per quarter toward share repurchases over the period, while dividend payments remained comparatively steady at about $21M to $25M per quarter.
Repurchase activity has been the dominant use of free cash flow, with quarterly buybacks exceeding dividends by a wide margin in most periods. This pattern suggests management is prioritizing per-share value creation while maintaining a consistent dividend. The allocation of cash toward acquisitions in 2024 and 2026 was episodic and small relative to buybacks, leaving debt reduction as a less visible use of proceeds.
Cumulative Cash Conversion Versus Earnings
Across the ten reported quarters, ALSN's cumulative operating cash flow appears to track or modestly exceed cumulative net income, with the recent recovery quarters contributing most of the excess, suggesting cash earnings have improved relative to book earnings.
Aggregating the quarterly series shows that the 2024 to 2025 period produced weaker conversion, while the 2026 quarters pulled the cumulative ratio upward. A longer history would be needed to determine whether this reflects a durable shift in earnings quality or a cyclical catch-up. The divergence should be interpreted cautiously given the limited window and the influence of working capital timing.
Elevated Conversion May Not Persist
The strongest challenge to the bullish cash flow reading is that the 1.80x operating cash flow to net income ratio in 2026Q3 may reflect temporary working capital release, and net debt to EBITDA of 1.9x could constrain flexibility if the recovery stalls.
If the recent conversion strength is driven by inventory or receivables liquidation, it would likely reverse as the business rebuilds stock to meet demand, compressing free cash flow without any change in earnings. The stated leverage level and the 2026 trailing revenue decline of about 6.7% suggest limited buffer should volumes soften again. Investors should weigh whether current buyback pace is sustainable if cash conversion normalizes toward its 2024 to 2025 levels.