Axalta Coating Systems has posted a record-breaking second quarter in 2026, powered by stronger sales, expanding margins and robust cash generation as the coatings giant moves closer to a proposed merger of equals with AkzoNobel.
The company reported $1.35 billion in second-quarter net sales, up 3% year over year, while Adjusted EBITDA reached a quarterly record of $305 million, representing a 22.7% margin. Adjusted diluted earnings per share also hit a new high at $0.72, rising 13% from the same period last year.
Axalta generated $107 million in free cash flow during the quarter, up 6% year over year, while total net leverage fell to 2.2x — the lowest level in the company’s history.
“We delivered an excellent second quarter with record Adjusted EBITDA and Adjusted Diluted EPS, expanded margins and strong free cash flow generation demonstrating the earnings power of our business model” said Chris Villavarayan, Chief Executive Officer and President of Axalta.
"Our team continues to drive operational excellence that underpins our consistent financial performance, and we carry solid momentum into the second half of the year.”
Axalta’s Performance Coatings segment delivered another strong quarter, with sales rising 4% year over year to $872 million. The company’s Refinish business was a key contributor, posting 6% year-over-year sales growth to $545 million, driven by acquisitions, favorable pricing and foreign currency benefits.
Industrial coatings sales increased 2% to $327 million, supported by volume growth in Europe and Asia and improved price mix.
Performance Coatings Adjusted EBITDA climbed 10% to $218 million, with margins expanding 130 basis points to 25.1%.
Mobility Coatings also achieved a record quarter, generating $474 million in sales, up 1% year over year. Commercial Vehicle sales jumped 7%, supported by volume gains across all four regions, although Light Vehicle sales declined slightly.
Mobility Coatings reported $87 million in Adjusted EBITDA and an 18.4% margin.
Axalta’s second-quarter net income totaled $89 million, compared with $110 million in the prior-year period. The decline was primarily linked to $31 million in additional merger and acquisition-related costs.
Excluding those costs, adjusted net income rose 10% year over year to $153 million, helped by lower operating expenses and reduced interest costs.
Diluted earnings per share stood at $0.41, while adjusted diluted EPS reached a record $0.72.
Operating cash flow increased 7% year over year to $152 million, reflecting improved working capital and lower interest payments.
The company is preparing for a Special General Meeting on August 5, where shareholders will vote on the proposed merger with AkzoNobel.
“We look forward to Axalta's Special General Meeting on August 5 to approve the compelling merger of equals with AkzoNobel. This strategic combination creates a premier global coatings company and provides significant value creation opportunities for Axalta shareholders” said Chris Villavarayan, Chief Executive Officer and President of Axalta.
The proposed combination aims to create a leading global coatings company with expanded scale and new growth opportunities.
Axalta expects third-quarter 2026 Adjusted EBITDA between $295 million and $305 million, with adjusted diluted EPS projected at approximately $0.70.
For the full year, the company expects: adjusted EBITDA at $1.14 billion to $1.17 billion. Adjusted diluted EPS: $2.55 to $2.70, and free cash flow more than $500 million.
With record profitability, stronger cash generation and a major strategic transaction ahead, Axalta enters the second half of 2026 with significant momentum.
