Dana Incorporated (NYSE:DAN) on Wednesday reported preliminary 2025 results at the high end of expectations and unveiled a 2026 roadmap centered on margin expansion and aggressive capital returns.
The Maumee, Ohio-based company showcased the immediate impact of its strategic pivot, headlined by the $2.7 billion divestiture of its Off-Highway business to Allison Transmission.
By utilizing the proceeds to slash debt by $1.9 billion, Dana has effectively streamlined its operations to focus on on-highway propulsion and energy-management solutions, significantly lowering its interest burden and risk profile as it enters the new fiscal year.
The company's 2025 performance underscored its commitment to efficiency, with roughly $250 million in cost savings realized during the year.
This discipline supported a substantial capital return program, in which Dana repurchased 34 million shares—approximately 23% of its outstanding stock—as part of a broader $1 billion return plan through 2027.
CEO R. Bruce McDonald noted that the transformation has left Dana "leaner and more focused," with a stronger balance sheet that allows for continued investment in traditional and electrified systems despite global market cyclicality.
For 2026, Dana is projecting a significant step-up in profitability, targeting adjusted EBITDA margins of 10% to 11%, up from 8% in 2025.
This optimism is underpinned by a $750 million three-year new business backlog, with $200 million of that expected to hit the top line this year.
While the Off-Highway exit creates a temporary revenue gap, the company's raised cost-savings target of $325 million is expected to more than offset stranded costs.
With net leverage now approaching its 1x target, Dana is positioning itself as a higher-margin, cash-generative player in the mobility sector, a narrative it plans to further detail at its upcoming Capital Markets Day in March.