Axalta Coating Systems (AXTA) Q1 2026 earnings summary

Executive summary

• Q1 2026 net sales reached $1.254 billion, with Adjusted EBITDA of $259 million and Adjusted Diluted EPS of $0.56, all exceeding guidance expectations.

• Record first quarter cash from operations ($68 million) and free cash flow ($21 million), both up significantly year over year.

• Achieved 12th consecutive quarter of year-over-year profitability improvement in Industrial; Mobility segment set record Q1 net sales and margin.

• Progressing as planned on the proposed merger with AkzoNobel, targeting $600 million in annual run-rate synergies and completion by late 2026 or early 2027.

• Won multiple innovation awards, including six BIG Innovation Awards and three Edison Awards.

Financial highlights

• Net sales were $1.254 billion, down 0.6% year-over-year, mainly due to lower volumes and unfavorable price mix in Performance Coatings, partially offset by FX.

• Adjusted EBITDA was $259 million (20.6% margin), down $11 million year over year but above guidance.

• Net income was $91 million, down from $99 million, impacted by merger transaction costs and offset by tax benefits and lower interest expense.

• Adjusted Diluted EPS was $0.56 (down $0.03 year over year), while reported EPS was $0.42.

• Operating cash flow improved by $42 million year over year; free cash flow increased by $35 million.

Outlook and guidance

• Maintaining full-year guidance for revenue, EBITDA, EPS, and free cash flow, but tracking toward the lower end of EBITDA and EPS ranges.

• FY 2026 Adjusted EBITDA guidance: $1,140 million–$1,170 million; Adjusted Diluted EPS: $2.55–$2.70; free cash flow projected to exceed $500 million.

• Q2 2026 net sales projected to be flat year over year; Adjusted EBITDA guidance of $280–$290 million; Adjusted EPS ~$0.65.

• Interest expense expected to decline by up to 24% for FY 2026; net leverage ratio targeted below 2.0x.

• Macro uncertainty from geopolitical tensions and inflation may pressure demand and costs in H2.