Cost-Saving Initiatives Push Margins Higher in Q3 2025
Dana Incorporated (NYSE: DAN) reported third-quarter 2025 results that reflect marked operational improvements. Accelerated execution on a $310 million cost-savings plan boosted the company’s adjusted EBITDA margin by 260 basis points, to 8.5%—despite steady sales volumes.
Full-Year Profit Guidance Increased as Off-Highway Sale Progresses
On the back of these cost-saving successes, Dana raised its 2025 full-year profit outlook. Management expects fourth-quarter adjusted EBITDA margins to align with its forecasted 2026 margin range of 10% to 10.5%, emphasizing ongoing margin expansion. The pending divestiture of the Off-Highway business remains on track to close in late Q4, with anticipated capital returns helping fuel an expanded $1 billion buyback program.
Key Q3 Metrics Reflect Efficiency and Improved Cash Flow
The latest quarter’s numbers underscore how effective cost control and working capital management have transformed the company’s earnings profile. The company also made significant share repurchases and realized robust operating and free cash flow improvement versus the previous year. Key results are summarized below:
| Metric | Q3 2025 | Q3 2024 | Change |
|---|---|---|---|
| Net Sales (Continuing Ops, $B) | 1.92 | 1.90 | +0.02 |
| Net Income (Continuing Ops, $M) | 13 | -21 | +34 |
| Adjusted EBITDA ($M) | 162 | 111 | +51 |
| Adj. EBITDA Margin (%) | 8.5 | 5.9 | +2.6 pts |
| Operating Cash Flow ($M) | 111 | 35 | +76 |
| Adjusted Free Cash Flow ($M) | 101 | -8 | +109 |
| Share Repurchases (Q3, MM shares) | 9.5 | N/A | N/A |
| Cost Savings Realized ($M) | 73 | N/A | N/A |
2025 Guidance Points to Continued Operational Strength
For the full year, Dana forecasts $7.3–$7.5 billion in sales and $570–$610 million in adjusted EBITDA from continuing operations. Adjusted free cash flow is expected to be in the $250–$300 million range, building on the year’s substantial gains.
| 2025 Full-Year Guidance | Range |
|---|---|
| Sales ($B) | 7.3–7.5 |
| Adjusted EBITDA ($M) | 570–610 |
| Adj. EBITDA Margin (%) | 7.8–8.1 |
| Operating Cash Flow ($M) | 390–440 |
| Adjusted Free Cash Flow ($M) | 250–300 |
Balance Sheet and Capital Allocation Support Shareholder Returns
With cash and equivalents of $414 million at quarter’s end, Dana’s active capital return strategy continues to gain steam. Year-to-date, 24.1 million shares have been repurchased, and the company expects total buybacks to reach $600 million by year’s end, funded in part by divestiture proceeds and rising cash generation.
Takeaway: Efficiency Gains Provide Room for More Upside
Dana’s latest results showcase how strong operational discipline can drive profitability even when revenue growth is modest. Margin expansion, robust cash flow, and targeted buybacks combine to support an increasingly shareholder-friendly story as the company approaches the completion of its Off-Highway sale. Investors should watch the Q4 closure for further signals on capital allocation and longer-term margin targets.
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