DANA's Q3 Net Income Soars on Discontinued Operations Boost

TL;DR

**DANA's Q3 looks strong on paper, but it's all about the Off-Highway sale – watch for how they reinvest that $2.7B.**

AI Summary

DANA Inc. reported a significant turnaround in net income for the three months ended September 30, 2025, reaching $87 million, a substantial increase from $11 million in the prior-year period. This improvement was largely driven by net income from discontinued operations, which rose to $74 million from $32 million. However, net sales from continuing operations slightly increased to $1,917 million from $1,897 million for the three-month period, but decreased for the nine-month period to $5,633 million from $5,960 million. The company's strategic outlook includes the definitive agreement to sell its Off-Highway business to Allison Transmission Holdings, Inc. for $2,732 million, expected to close in Q4 2025, which is classified as a discontinued operation. Risks include a decrease in cash and cash equivalents to $414 million from $494 million since December 31, 2024, and an increase in short-term debt to $630 million from $8 million. Despite these, net income attributable to the parent company saw a strong rise to $83 million for the quarter, up from $4 million in Q3 2024.

Why It Matters

DANA's strategic divestiture of its Off-Highway business for $2,732 million to Allison Transmission Holdings, Inc. is a game-changer, allowing the company to streamline its focus on high-technology driveline and EV components. This move could significantly impact investors by improving DANA's financial flexibility and potentially enhancing its competitive position against rivals like BorgWarner and American Axle & Manufacturing in the evolving automotive and commercial vehicle markets. Employees in the Off-Highway division face a transition to Allison, while DANA's remaining workforce will concentrate on core growth areas. Customers of the Off-Highway business will now be served by Allison, potentially affecting supply chain dynamics. The broader market will watch how DANA leverages this capital to accelerate its electrification strategy and adapt to industry shifts.

Risk Assessment

Risk Level: medium — The company's cash and cash equivalents decreased from $494 million at December 31, 2024, to $414 million at September 30, 2025. Concurrently, short-term debt surged from $8 million to $630 million over the same period, indicating increased reliance on short-term financing. While the Off-Highway business sale is significant, the current financial structure shows increased leverage.

Analyst Insight

Investors should closely monitor the closing of the Off-Highway business sale to Allison Transmission Holdings, Inc. and DANA's subsequent capital allocation strategy. Evaluate how the $2,732 million proceeds will be used to reduce debt, fund electrification initiatives, or return capital to shareholders, as this will dictate future growth and profitability.

Financial Highlights

debt To Equity

N/A

revenue

$1,917M

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$87M

eps

$0.65

gross Margin

N/A

cash Position

$414M

revenue Growth

+1.1%

Revenue Breakdown

Key Numbers

• $87M — Net Income (Q3 2025) (Increased from $11M in Q3 2024, largely due to discontinued operations.)
• $1,917M — Net Sales (Continuing Operations, Q3 2025) (Slight increase from $1,897M in Q3 2024.)
• $5,633M — Net Sales (Continuing Operations, YTD 2025) (Decreased from $5,960M in YTD 2024.)
• $2,732M — Off-Highway Business Sale Price (Definitive agreement to sell to Allison Transmission Holdings, Inc.)
• $414M — Cash and Cash Equivalents (Decreased from $494M at December 31, 2024.)
• $630M — Short-Term Debt (Increased significantly from $8M at December 31, 2024.)
• $0.65 — Basic EPS (Q3 2025) (Increased from $0.03 in Q3 2024, driven by discontinued operations.)
• 128.4M — Basic Weighted-Average Common Shares Outstanding (Q3 2025) (Decreased from 145.0M in Q3 2024.)
• $83M — Net Income Attributable to Parent Company (Q3 2025) (Increased from $4M in Q3 2024.)
• $106M — Net Cash Provided by Operating Activities (YTD 2025) (Decreased from $148M in YTD 2024.)

Key Players & Entities

• DANA Inc. (company) — global provider of high technology driveline and EV components
• Allison Transmission Holdings, Inc. (company) — acquirer of DANA's Off-Highway business
• $87 million (dollar_amount) — net income for the three months ended September 30, 2025
• $11 million (dollar_amount) — net income for the three months ended September 30, 2024
• $74 million (dollar_amount) — net income from discontinued operations for Q3 2025
• $32 million (dollar_amount) — net income from discontinued operations for Q3 2024
• $1,917 million (dollar_amount) — net sales from continuing operations for Q3 2025
• $2,732 million (dollar_amount) — sale price of Off-Highway business
• $414 million (dollar_amount) — cash and cash equivalents at September 30, 2025
• $630 million (dollar_amount) — short-term debt at September 30, 2025

FAQ

Risk Factors

• Decreasing Cash Position [medium — financial]: Cash and cash equivalents decreased to $414 million as of September 30, 2025, from $494 million at December 31, 2024. This reduction in liquidity could impact the company's ability to fund operations or invest in growth opportunities.
• Significant Increase in Short-Term Debt [high — financial]: Short-term debt has surged to $630 million from $8 million at December 31, 2024. This substantial increase in short-term obligations raises concerns about the company's short-term financial flexibility and potential refinancing risks.
• Decline in Year-to-Date Sales [medium — operational]: Net sales from continuing operations for the nine months ended September 30, 2025, decreased to $5,633 million from $5,960 million in the same period of 2024. This indicates a potential slowdown in core business performance.
• Reduced Operating Cash Flow [medium — financial]: Net cash provided by operating activities for the nine months ended September 30, 2025, declined to $106 million from $148 million in the prior year. This decrease in cash generation from operations could strain financial resources.
• Divestiture of Off-Highway Business [medium — strategic]: The company is in the process of selling its Off-Highway business for $2,732 million, which is classified as a discontinued operation. While this may streamline operations, the execution and integration of this divestiture carry inherent risks.

Industry Context

Dana operates in the global automotive and commercial vehicle supply industry, providing driveline, sealing, and thermal-management products. The industry is undergoing significant transformation with the shift towards electric vehicles, requiring substantial investment in new technologies and product development. Competition is intense, with established players and new entrants vying for market share.

Regulatory Implications

The sale of the Off-Highway business is subject to regulatory approvals, which could delay or impact the transaction's completion. Compliance with environmental, safety, and emissions regulations remains a constant factor for automotive suppliers like Dana, potentially leading to increased costs or product redesigns.

What Investors Should Do

1. Monitor the closing of the Off-Highway business sale.
2. Analyze the impact of increased short-term debt.
3. Evaluate the performance of continuing operations.

Key Dates

• 2025-09-30: End of Third Quarter 2025 — Reporting period for the 10-Q, showing a significant increase in net income driven by discontinued operations and a slight rise in continuing operations net sales.
• 2025-Q4: Expected Closing of Off-Highway Business Sale — The sale of the Off-Highway business to Allison Transmission Holdings, Inc. for $2,732 million is anticipated to close, impacting the company's structure and financial results.
• 2025-06: Definitive Agreement for Off-Highway Business Sale — Dana entered into the agreement to sell its Off-Highway business, leading to its classification as a discontinued operation.
• 2024-12-31: End of Fiscal Year 2024 — Baseline for comparison of cash and cash equivalents ($494M) and short-term debt ($8M) as of September 30, 2025.

Glossary

Continuing Operations

The ongoing business activities of a company that are expected to continue into the future, excluding any divested or discontinued segments. (Key for understanding the performance of Dana's core business, as distinct from the impact of the Off-Highway sale.)

Discontinued Operations

A component of an entity that has been disposed of or is classified as held for sale, and represents a strategic shift that has or will have a major effect on the entity's operations and financial results. (Crucial for understanding the significant increase in Dana's net income, primarily driven by the Off-Highway business sale.)

Net Sales

The total revenue generated from the sale of goods or services, net of returns, allowances, and discounts. (Indicates the top-line performance of the company's operations.)

Basic Earnings Per Share (EPS)

The net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period. (A key profitability metric for shareholders, showing how much profit is generated per share of common stock.)

Net Cash Provided by Operating Activities

The net amount of cash generated from a company's normal business operations over a period. (Indicates the company's ability to generate cash from its core business to fund its activities and obligations.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, Dana has demonstrated a remarkable turnaround in net income, soaring to $87 million from $11 million, largely propelled by a significant increase in net income from discontinued operations. While net sales from continuing operations saw a modest uptick of 1.1% for the quarter, the year-to-date sales for continuing operations have declined by 5.5%. A key concern is the substantial increase in short-term debt to $630 million from $8 million, alongside a decrease in cash and cash equivalents to $414 million from $494 million, indicating a shift in the company's short-term financial leverage and liquidity position.

Key Financial Figures

• $0.01 — Section 12(b) of the Act: Common stock $0.01 par value DAN New York Stock Exchan

Filing Documents

• dan20250930_10q.htm (10-Q) — 2729KB
• ex_854614.htm (EX-31.1) — 15KB
• ex_854615.htm (EX-31.2) — 12KB
• ex_854616.htm (EX-32) — 6KB
• 0001437749-25-032594.txt ( ) — 14139KB
• dan-20250930.xsd (EX-101.SCH) — 97KB
• dan-20250930_cal.xml (EX-101.CAL) — 103KB
• dan-20250930_def.xml (EX-101.DEF) — 621KB
• dan-20250930_lab.xml (EX-101.LAB) — 542KB
• dan-20250930_pre.xml (EX-101.PRE) — 671KB
• dan20250930_10q_htm.xml (XML) — 3452KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1

Financial Statements

Financial Statements 3 Consolidated Statement of Operations (Unaudited) 3 Consolidated Statement of Comprehensive Income (Unaudited) 4 Consolidated Balance Sheet (Unaudited) 5 Consolidated Statement of Cash Flows (Unaudited) 6

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 7 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 37 Item 4

Controls and Procedures

Controls and Procedures 37

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 38 Item 1A

Risk Factors

Risk Factors 38 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 38 Item 5 Other Information 38 Item 6 Exhibits 38

Signatures

Signatures 39 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Dana Incorporated Consolidated Statement of Operations (Unaudited) (In millions, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Net sales $ 1,917 $ 1,897 $ 5,633 $ 5,960 Costs and expenses Cost of sales 1,751 1,775 5,211 5,609 Selling, general and administrative expenses 87 106 291 328 Amortization of intangibles 2 2 6 6 Restructuring charges, net 4 20 17 36 Gain (loss) on disposal group previously held for sale 4 ( 26 ) Other income (expense), net ( 20 ) ( 6 ) ( 31 ) ( 14 ) Earnings (loss) from continuing operations before interest and income taxes 53 ( 8 ) 77 ( 59 ) Interest income 3 5 8 9 Interest expense 47 38 130 117 Income (loss) from continuing operations before income taxes 9 ( 41 ) ( 45 ) ( 167 ) Income tax benefit ( 2 ) ( 18 ) ( 2 ) ( 13 ) Equity in earnings of affiliates 2 2 27 7 Net income (loss) from continuing operations 13 ( 21 ) ( 16 ) ( 147 ) Net income from discontinued operations 74 32 164 174 Net income 87 11 148 27 Less: Noncontrolling interests net income from continuing operations 4 7 13 17 Less: Redeemable noncontrolling interests net loss from continuing operations ( 13 ) Net income attributable to the parent company $ 83 $ 4 $ 135 $ 23 Net income per share available to common stockholders Basic earnings (loss) per share from continuing operations $ 0.07 $ ( 0.19 ) $ ( 0.21 ) $ ( 1.04 ) Basic earnings per share from discontinued operations 0.58 0.22 1.18 1.20 Basic earnings per share $ 0.65 $ 0.03 $ 0.97 $ 0.16 Diluted earnings (loss) per share from continuing operations $ 0.07 $ ( 0.19 ) $ ( 0.21 ) $ ( 1.04 ) Diluted earnings per share from discontinued operations 0.57 0.22 1.18 1.20 Diluted earnings per share $ 0.64 $ 0.03 $ 0.97 $ 0.16 Weighted-average common shares outstanding Basic 128.4 145.0 139.2 144.9 Diluted 130.8 145.0 139.2 144.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) (In millions, except share and per share amounts) Note 1. Organization and Summary of Significant Accounting Policies General Dana Incorporated (Dana) is headquartered in Maumee, Ohio and was incorporated in Delaware in 2007. Dana is a global provider of high technology driveline (axles, driveshafts and transmissions); sealing and thermal-management products; and motors, power inverters, and control systems for electric vehicles with a customer base that includes virtually every major on-highway vehicle manufacturer in the world. The terms "Dana," "we," "our" and "us," when used in this report, are references to Dana. These references include the subsidiaries of Dana unless otherwise indicated or the context requires otherwise. Summary of significant accounting policies Basis of presentation — Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. These statements are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the interim periods. The results reported in these consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the consolidated financial statements in Item 8 of our Annual Report on Form 10 -K for the year ended December 31, 2024 (the 2024 Form 10 -K). Certain prior year amounts have been reclassified to conform to the current presentation. In June 2025, we entered into a definitive agreement to sell our Off-Highway business. The transaction is currently expected to close during the fourth quarter of 2025, subject to satisfaction of regulatory approvals and other customary conditions. We concluded that our

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