Axalta Coating Systems Ltd., a supplier of refinish coatings used by collision repair shops across the country, reported record adjusted earnings for the second quarter of 2026, with refinish net sales rising 6% year over year to $545 million, according to results the company released July 28.
Acquisitions, a favorable pricing mix and currency translation contributed to the gain, Axalta said in the release. The growth follows a decline in the first quarter, when refinish sales had fallen 3% to $498 million, a decline the company tied mainly to softer volumes and pricing in North America, according to Axalta's first-quarter 2026 results.
Consolidated results beat estimates
Companywide, net sales climbed to $1.35 billion, a 3% year-over-year gain, according to the company's earnings release. Adjusted diluted earnings per share reached a record $0.72, up 13% from $0.64 in the second quarter of 2025.
Both figures beat Wall Street projections. Analysts had estimated adjusted earnings of $0.65 per share and revenue of $1.31 billion for the quarter, according to a report on the results.
Net income fell to $89 million from $110 million a year earlier, resulting in a net income margin of 6.6%, down from 8.4%. The company said $31 million in added merger and acquisition costs accounted for most of the decline, according to the earnings release. Adjusted EBITDA, which excludes those costs, reached a quarterly record of $305 million, a 5% increase that produced a margin of 22.7%, up 30 basis points from the prior-year period.
Free cash flow rose 6% to $107 million, and cash provided by operating activities increased 7% to $152 million. The company's total net leverage ratio stood at 2.2 times, which Axalta said is the lowest in its history.
Refinish and mobility segment results
Axalta's Performance Coatings segment, which includes the Refinish and Industrial businesses, posted net sales of $872 million, up 4% year over year, according to the earnings release. Segment Adjusted EBITDA for Performance Coatings rose 10% to $218 million, with margin improving 130 basis points to 25.1%.
Within the segment, Industrial net sales increased 2% to $327 million, supported by positive volume growth in Europe and Asia.
Axalta's Mobility Coatings segment, which serves light and commercial vehicle manufacturers, set a quarterly record at $474 million, a 1% increase from a year earlier. Light Vehicle net sales declined slightly, while Commercial Vehicle net sales grew 7% on volume increases across all four of the company's regions, the release said. The segment's Adjusted EBITDA came in at $87 million, an 18.4% margin.
"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," Chris Villavarayan, Axalta's chief executive officer and president, said in the release. "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."
Merger with AkzoNobel advances toward shareholder vote
Villavarayan also addressed Axalta's pending merger with AkzoNobel, an all-stock combination the companies said would create a "premier global coatings company" when they announced the deal Nov. 18, 2025. The transaction values the combined company at approximately $25 billion.
"We look forward to Axalta's Special General Meeting on August 5 to approve the compelling merger of equals with AkzoNobel," Villavarayan said in the release. "This strategic combination creates a premier global coatings company and provides significant value creation opportunities for Axalta shareholders."
AkzoNobel, which reported its own second-quarter results July 22, said on its earnings call that the merger is progressing as planned toward the Aug. 5 shareholder vote, with closing expected in late 2026 or early 2027, according to AkzoNobel's second-quarter results.
Company projects growth to continue into third quarter
For the third quarter of 2026, Axalta projected net sales growth in the low single digits, Adjusted EBITDA of $295 million to $305 million and Adjusted Diluted EPS of approximately $0.70, according to the earnings release. For full-year 2026, the company projected net sales growth in the low single digits, Adjusted EBITDA of $1.14 billion to $1.17 billion, Adjusted Diluted EPS of $2.55 to $2.70, and free cash flow exceeding $500 million.
