Dana Q1 Earnings Call Highlights

Key Points

• Dana reported Q1 sales of $1.868 billion and adjusted EBITDA of $171 million, with adjusted EBITDA margin expanding to 9.2% (a 400‑basis‑point YoY improvement) as management points to early execution of its Dana 2030 targets ($10B revenue and 14–15% adj. EBITDA by 2030).
• The company repurchased 4.4 million shares for $125 million in the quarter (returning $775 million since the program began) and delivered $35 million in cost reductions, keeping it on track for a $300 million 2026 repurchase goal and a $2 billion through‑2030 target.
• Dana won the Stellantis Ram Dakota award to supply front and rear axles—expected to add about $250 million of annual sales—and raised its three‑year net new sales backlog to $950 million (from $750M), with roughly $200M shifted into 2028 backlog and over 60% of growth through 2030 now secured.

Dana NYSE: DAN reported first-quarter 2026 results that executives said marked a return to revenue growth and a sharp year-over-year improvement in profitability as the company begins executing its “Dana 2030” plan.

Chairman and CEO R. Bruce McDonald, who noted this was his final earnings call as CEO before transitioning to chairman, said the quarter showed “revenue growth and extremely strong year-over-year improvement on margins.” McDonald also pointed to the company’s long-term targets, including a $10 billion revenue “bogey” and adjusted EBITDA margins in the 14% to 15% range by 2030.

First-quarter results show margin expansion

Senior Vice President and CFO Timothy Kraus said first-quarter 2026 sales were $1.868 billion, up from $1.781 billion in the prior-year quarter. Kraus attributed the change in sales to several factors, including a $33 million headwind from volume/mix due to “lower end market demand,” partially offset by $48 million from tariffs (primarily recovery timing), $64 million from currency (driven largely by euro strength), and $6 million from commodities.

Adjusted EBITDA rose to $171 million, up from $93 million a year earlier, with adjusted EBITDA margin increasing to 9.2% from 5.2%. Kraus said the year-over-year change in adjusted EBITDA reflected:

• $27 million benefit from volume/mix, which he said reflected “favorable mix and improved profitability on new programs”
• $15 million from performance actions, driven by operating efficiency and cost control
• $35 million from cost savings
• $2 million headwind from tariffs
• $5 million tailwind from currency
• $2 million headwind from commodities

Incoming CEO and Light Vehicle Drive Systems President Byron Foster highlighted the quarter’s profitability improvement, saying the 9.2% margin represented a 400-basis-point year-over-year expansion.

Share repurchases and cost actions

Foster said Dana repurchased 4.4 million shares during the quarter, returning $125 million to shareholders and keeping the company on track for its $300 million repurchase target for 2026. Since the repurchase program launched in the second quarter of 2025, Foster said the company has returned $775 million and remains on track for $2 billion through 2030.

On cost reductions, Foster said the company delivered $35 million in cost reductions in the quarter, in line with a $65 million target for 2026 and a $325 million cumulative program target.

Free cash flow use reflects working capital dynamics

Kraus said adjusted free cash flow for the first quarter was a use of $195 million. He noted that 2025 comparisons include both continuing and discontinued operations due to the company’s off-highway transaction, while 2026 reflects only continuing operations. He said adjusted free cash flow from continuing operations improved by $78 million year over year, helped by “strong operations following the completion of the sale of our off-highway business.”

However, Kraus said working capital was a use of $224 million, driven largely by higher accounts receivable and timing related to VAT recoveries and customer paid tooling. He also cited a $20 million year-over-year decline in one-time costs and a $6 million increase in net interest expense tied to the timing of interest payments after debt repayment activity related to the off-highway sale.

New Stellantis Ram Dakota award adds backlog visibility

Foster detailed a new business award tied to Stellantis’ Ram Dakota program, with Dana supplying front and rear axles. Foster said the award is expected to represent $250 million of annual sales and is slated to launch in early 2028. He described the win as leveraging installed capacity supporting the Toledo Assembly Complex and focused on Dana’s internal combustion engine (ICE) core products.

Foster also said Dana’s three-year net new sales backlog increased to $950 million from $750 million previously, noting that as the Ram Dakota program ramps, some of the $250 million annual sales opportunity would fall into the 2029 time horizon.

Kraus said the win improved the “timing and quality” of Dana’s backlog, moving approximately $200 million of growth from an “additional backlog” category into the 2028 backlog category and shifting $50 million from non-secured into secured backlog. McDonald added that with the award, Dana has “just over 60% of our growth through 2030 secured.”

Guidance unchanged, but management sees results trending higher

Kraus said Dana’s full-year 2026 guidance ranges were unchanged, but the company now expects to be at the upper end of its sales range with a “commensurate adjusted EBITDA increase.” At the midpoint, the company reiterated expectations for:

• Sales of about $7.5 billion
• Adjusted EBITDA of about $800 million, roughly 10% to 11% margin at the midpoint
• Diluted adjusted EPS of about $2.50 (based on 109 million shares and excluding future repurchases)
• Adjusted free cash flow of about $300 million

He said the outlook assumes lower demand in traditional markets and “ongoing softness in electrical light vehicle programs” impacting Dana’s battery cooling business, offset by increased backlog and higher-margin new business. Kraus also pointed to potential second-half improvement in commercial vehicles, higher tariff recoveries, and currency translation as factors that “will likely push us higher in our range for sales.”

During Q&A, Kraus said Dana typically sees stronger performance in the second and third quarters, with the strongest weighting “probably more weighted to third quarter,” while the fourth quarter is usually softer due to production schedules. He also addressed product mix dynamics, saying EV-related pricing improvements have contributed to profitability even amid lower volumes, adding that the pricing is “generally” structural over the course of the program rather than a one-time benefit.

Kraus also said Dana expects to use proceeds from its off-highway sale to buy out some facility leases, describing the likely magnitude as “tens and tens of millions of dollars,” though he said negotiations were ongoing.

About Dana NYSE: DAN

Dana Incorporated is a global leader in the design and manufacture of drivetrain, sealing, and thermal-management technologies for the automotive, commercial vehicle, off-highway and industrial markets. The company's product portfolio includes axles, driveshafts, transmissions, e-Propulsion systems and thermal-management assemblies that help improve fuel efficiency, reduce emissions and enhance vehicle performance. Dana's expertise spans internal combustion and electrified powertrains, positioning it to support both traditional and next-generation mobility solutions.

Founded in 1904 by Clarence W.

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