Dana Incorporated — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third-quarter 2026 sales totaled $2.038 billion, an increase of $121 million compared to $1.917 billion in the same period of 2025.
• Adjusted EBITDA for the quarter was $218 million, up $56 million from $162 million in Q3 2025, representing a 10.7% margin compared to 8.5% in the prior year.
• Net loss from continuing operations was $10 million, compared to net income of $13 million in Q3 2025; diluted loss per share from continuing operations was $0.13 versus $0.07 earnings per share last year.
• Adjusted net income improved to $44 million from an adjusted net loss of $5 million in the prior-year period, with diluted adjusted EPS improving to $0.41 from $0.04.
• Operating cash flow was $102 million in Q3 2026, down from $111 million in Q3 2025.
• Adjusted free cash flow was $66 million in Q3 2026, compared to $101 million in the prior-year period.
• Year-to-date sales were $5.916 billion compared to $5.633 billion in the same period of 2025.
• Year-to-date adjusted EBITDA was $596 million compared to $402 million in 2025.
• Year-to-date adjusted free cash flow was negative $61 million compared to negative $7 million in 2025.
• Net interest expense declined by $28 million year-over-year following debt-reduction actions.
• Income tax expense included a $29 million charge related to a foreign income tax settlement, partially offset by a $12 million benefit from post Off-Highway sale restructuring.
• A $24 million loss on the extinguishment of debt was recorded in Q3 2026.

Guidance and Future Outlook:

• Dana revised full-year 2026 sales guidance upward by approximately $50 million to a range of $7.75 billion to $7.85 billion.
• Full-year 2026 adjusted EBITDA guidance remains $800 million to $850 million, with an implied margin of approximately 10.6%.
• Full-year 2026 diluted adjusted EPS guidance remains $1.75 to $2.25.
• Full-year 2026 adjusted free cash flow guidance remains $275 million to $375 million.
• The company expects to achieve at least $250 million in run-rate cost synergies within 24 months post-closing of the Eaton Mobility transaction.
• Tariff costs are expected to be substantially recovered within the year, though commodities remain a modest margin headwind.
• The company anticipates continuing to offset approximately $40 million of stranded costs from the Off-Highway sale.

Business Segments and Product Lines:

• Light Vehicle Systems sales were $1.371 billion in Q3 2026, up from $1.353 billion in Q3 2025.
• Commercial Vehicle Systems sales were $667 million in Q3 2026, up from $564 million in Q3 2025.
• Light Vehicle Systems adjusted EBITDA was $151 million in Q3 2026, compared to $126 million in Q3 2025.
• Commercial Vehicle Systems adjusted EBITDA was $69 million in Q3 2026, compared to $51 million in Q3 2025.
• Corporate expense and other items, net, were a loss of $2 million in Q3 2026, compared to a loss of $15 million in Q3 2025.
• Year-to-date Light Vehicle Systems adjusted EBITDA was $406 million compared to $306 million in 2025.
• Year-to-date Commercial Vehicle Systems adjusted EBITDA was $200 million compared to $139 million in 2025.
• The company achieved $60 million in cost savings year-to-date, with a program target of $325 million to be realized in Q4.
• Automation projects are active in 11 plants with 38 units deployed, targeting $20 million in run-rate cost savings in 2027.

Market and Competitive Landscape:

• Sales growth was primarily driven by stronger commercial vehicle demand, backlog conversion, and commercial and cost-recovery actions.
• North American Class 8 production volume is supported by improving freight economics and replacement demand.
• North American Class 5-7 and bus production volume is supported by government, utility, and infrastructure investment driving vocational demand.
• Dana is leveraging increasing production volumes to gain market share.
• Supply-chain constraints and regulatory uncertainty pose the greatest risk to near-term volumes.
• The company plans to leverage Eaton Mobility's North American commercial vehicle fleet sales force to expand Dana driveline product penetration.
• Dana intends to utilize its North American 'big-box' retail relationships to expand distribution of Eaton Mobility products in the aftermarket.

Risks and Challenges:

• Risks include the ability to complete the proposed Eaton Mobility transaction on the anticipated timeframe or terms, including failure to obtain requisite stockholder and/or regulatory approvals.
• Potential difficulties in integrating the businesses of Dana and SpinCo.
• Risks related to the ability to realize anticipated benefits, including estimated combined EBITDA, revenue, and cost synergies.
• Risks that the transaction may be more expensive to complete than anticipated due to unexpected factors or unforeseen liabilities.
• Risks related to the ability to obtain financing for the transaction upon acceptable terms.
• Risks related to evolving legal, regulatory, and tax regimes, including the risk that anticipated tax treatment is not obtained.
• Risks related to disruption of management time and effects on relationships with employees, customers, suppliers, or counterparties.
• Global economic repercussions related to inflationary pressures and potential recessionary concerns.
• Currency fluctuations were a benefit in Q3 2026, largely driven by the real and rand, though tariff timing was a modest margin headwind.

Management Commentary and Tone:

• CEO Byron Foster stated the company delivered strong results reflecting a continued focus on operating the business well and executing strategy with discipline.
• Management noted that productivity gains, commercial initiatives, and structural cost reductions are driving meaningful margin improvement.
• Foster expressed confidence in the value the Eaton Mobility transaction will create for shareholders, customers, and employees.
• Management emphasized maximizing opportunities to return capital to shareholders while moving toward closing the transaction.
• The tone indicates confidence in Dana's standalone performance and commitment to shareholder value through increased repurchases.

Other Key Points:

• The Eaton Mobility transaction remains on track to close around the end of the first quarter of 2027.
• Nearly all regulatory approvals have been obtained, with only one remaining pending.
• The transaction is structured as a split-off and Reverse Morris Trust transaction intended to be tax-free to Dana and Eaton shareholders.
• Dana repurchased 6.6 million shares for $200 million in the third quarter, bringing year-to-date share repurchases to $369 million.
• The company plans an additional approximately $100 million in share repurchases in the fourth quarter of 2026.
• The $2 billion share repurchase authorization is expected to be completed by mid-2029.
• The company utilized a portion of proceeds from the Off-Highway sale to buy out certain facility leases, which were excluded from adjusted free cash flow.
• A $29 million charge related to the settlement of a foreign income tax was recorded in Q3 2026.
• The company reported a $24 million loss on the extinguishment of debt in Q3 2026.