Axalta Coating Systems (NYSE: AXTA) reported first-quarter 2026 results April 30, posting net sales of $1.25 billion, down 1% from a year earlier, and adjusted diluted earnings per share of $0.56, beating consensus estimates by 12%. The company exceeded its own guidance on net sales, adjusted EBITDA, and adjusted EPS, while reporting record first-quarter free cash flow and operating cash flow.
Net income was $91 million, with a net income margin of 7.3%. Adjusted EBITDA was $259 million, with an adjusted EBITDA margin of 20.6%. Operating cash flow set a Q1 record at $68 million, up $42 million year over year, and free cash flow set a Q1 record at $21 million, up $35 million. Interest expense declined 14%.
Refinish stabilizes as destocking eases
Refinish net sales declined 3% year over year to $498 million, reflecting lower volumes and unfavorable price mix primarily in North America. Total Performance Coatings net sales were $802 million, down from $822 million, with year-over-year growth in every region outside North America.
On the company's earnings call, CEO Chris Villavarayan said refinish sales were "consistent with the last five quarters" at nearly $500 million. He said Axalta's net body shop wins increased 10% year over year, which he described as a record quarter, and that the company was expanding with leading multi-shop operators.
CFO Carl Anderson said the segment's volume softness reflected "lower claims activity and shifting customer order patterns as anticipated," and that destocking trends were beginning to abate. Villavarayan said Axalta had stayed away from commenting on competitors and pointed to the body shop wins metric as the company's preferred measure of refinish positioning.
The Axalta commentary completes a four-supplier picture for U.S. refinish demand in Q1 from earnings calls reported this month. AkzoNobel CEO Greg Poux-Guillaume said U.S. refinish demand had stabilized at a trough but had not yet picked up. Sherwin-Williams reported automotive refinish sales increased by a double-digit percentage on share-of-wallet gains. PPG attributed its own double-digit refinish decline to distributor destocking, with recovery expected in the second half.
Performance Coatings adjusted EBITDA was $180 million, down from $197 million, with margin of 22.4%.
Mobility hits record Q1 sales
Mobility Coatings achieved record first-quarter net sales of $452 million, up 3% year over year. Light Vehicle sales rose on organic growth in three of four regions and favorable foreign currency. Commercial Vehicle sales rose 3% on positive price mix, volume growth in Europe and Asia, and favorable foreign currency, offsetting lower volumes from a decline in Class 8 truck production.
Mobility adjusted EBITDA was $79 million, up 9% year over year, with margin improving 100 basis points to 17.5%.
AkzoNobel merger on track as Axalta maintains full-year outlook
Villavarayan said Axalta was progressing through workstreams associated with the proposed merger of equals with AkzoNobel as planned and was on track with the stated timeline. The all-stock merger, announced in November 2025, would combine two of the largest refinish suppliers serving collision repair shops globally and is valued at approximately $25 billion.
On the earnings call, Villavarayan described the $600 million synergy target as a "floor," citing scale opportunities in purchasing as the combined company's direct spend reaches more than $6.5 billion.
For the second quarter, Axalta projected approximately flat year-over-year net sales, adjusted EBITDA of $280 million to $290 million, and adjusted diluted EPS of approximately $0.65. Anderson said the company is maintaining its previous full-year 2026 guidance for revenue, adjusted EBITDA, adjusted EPS, and free cash flow, but added that Axalta is "tracking closer to the lower end of EBITDA and EPS guidance given the demand signals we are seeing at this time."
Full-year guidance projects low-single-digit net sales growth, adjusted EBITDA of $1.14 billion to $1.17 billion, adjusted diluted EPS of $2.55 to $2.70, and free cash flow of more than $500 million.
