Dana Incorporated (DAN) - 10-K Filing Summary
Business Context and Reporting Period
Company: Dana Incorporated
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: Dana is a global provider of power-conveyance and energy-management solutions for on-highway vehicles, serving light and commercial vehicle OEMs. The company operates two segments: Light Vehicle Drive Systems and Commercial Vehicle Drive and Motion Systems.
Strategic Shift: In June 2025, Dana entered an agreement to sell its Off-Highway business to Allison Transmission Holdings, Inc., which closed on January 1, 2026. This business is now reported as discontinued operations. The company also realigned its operating segments in Q1 2025, integrating the former Power Technologies segment into Light and Commercial Vehicle segments.
Key Financial Metrics (2025)
| Metric | 2025 (Continuing Ops) | 2024 (Continuing Ops) | Change |
|---|---|---|---|
| Net Sales | $7,500 million | $7,734 million | (3.0%) |
| Gross Margin | $602 million (8.0%) | $378 million (4.9%) | +310 bps |
| Net Income (Loss) from Continuing Ops | ($53) million | ($342) million | Improvement |
| Net Income from Discontinued Ops | $155 million | $293 million | (47.1%) |
| Net Income Attributable to Parent | $85 million | ($57) million | Turnaround to Profit |
| Adjusted EBITDA | $610 million | $395 million | +54.4% |
| Adjusted Free Cash Flow | $331 million | $81 million | +308.6% |
| Operating Cash Flow | $512 million | $450 million | +13.8% |
Note: Financial data for 2025 includes the impact of discontinued operations for the Off-Highway business. Continuing operations reflect the core on-highway business.
Material Changes vs. Prior Period
- Revenue Decline: Consolidated sales decreased 3% to $7.5 billion, driven by lower production volumes in North America (full-frame light trucks and Class 8 trucks) and lower EV product orders in Europe and Asia Pacific. Currency effects provided a $28 million tailwind.
- Margin Expansion: Gross margin improved significantly to 8.0% from 4.9% in 2024. This was driven by cost reduction initiatives ($223 million benefit), material cost savings ($90 million), and operational efficiencies, partially offset by inflation and tariff impacts.
- Profitability: The company returned to net profitability ($85 million) in 2025 compared to a net loss of $57 million in 2024, primarily due to the $155 million income from discontinued operations and improved operating performance in continuing operations.
- Restructuring: Net restructuring charges decreased to $23 million in 2025 from $70 million in 2024, as the company executed on cost-saving plans announced in late 2024.
- Divestiture: The Off-Highway business was sold for initial cash proceeds of $2,664 million. Proceeds were used to pay down debt and fund share repurchases.
Guidance, Outlook, and Risks
2026 Outlook:
- Sales: $7.3 billion to $7.7 billion.
- Adjusted EBITDA: $750 million to $850 million (Midpoint margin of 10.7%).
- Adjusted Free Cash Flow: $250 million to $350 million.
Management Commentary:
- Cost Savings: The company expects to deliver annualized savings of $325 million through 2026. Approximately $260 million was realized in 2025, with $65 million remaining for 2026.
- Capital Allocation: Net proceeds from the Off-Highway sale were used to redeem significant portions of senior notes and the Term A Facility. The Board increased the share repurchase program to $2,000 million through 2030.
- Backlog: Net new business backlog for 2026-2028 is $750 million, with $200 million expected to be realized in 2026.
Key Risks and Contingencies:
- Customer Concentration: Ford (32% of sales) and Stellantis (13% of sales) represent significant revenue concentration.
- EV Transition: Delays in EV adoption have led to cost reduction actions and impairment charges on EV program assets ($16 million in 2025).
- Geopolitical & Trade: Exposure to tariffs, trade policies, and currency fluctuations (43% of sales are non-U.S.). Argentina remains a highly inflationary economy.
- Supply Chain: Risks related to raw material costs (steel, aluminum) and component shortages.
Investor Verification Checklist
- Debt Reduction: Verify the extent of debt paydown using the $2.66 billion Off-Highway sale proceeds and the impact on interest expense in 2026.
- Cost Savings Realization: Monitor the realization of the remaining $65 million in annualized cost savings and the sustainability of the 8.0% gross margin.
- EV Program Viability: Assess the impact of ongoing EV program cancellations or volume declines on future impairment charges and R&D spend.
- Customer Volume: Track production volumes for Ford and Stellantis, particularly in the North American light truck and Class 8 segments, which drove the 2025 sales decline.
- Share Repurchases: Confirm the execution of the expanded $2,000 million share repurchase program and its impact on earnings per share.