Axalta Releases Third Quarter 2026 Results
Mobility Coatings expanded its adjusted margin, while lower Performance Coatings volumes and higher variable costs weighed on earnings.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Axalta Coating Systems (NYSE:AXTA) reported third-quarter 2026 sales growth of 2% as earnings declined and Mobility Coatings achieved record quarterly sales. Sales reached $1.3 billion, while net income fell $15 million year over year to $95 million. Diluted earnings per share declined to $0.44 from $0.51. Adjusted EBITDA, an adjusted measure of earnings before interest, taxes, depreciation and amortization, fell 4% to $282 million.
Performance Coatings sales fell to $818 million, while Mobility Coatings sales increased 7% to $493 million. Free cash flow rose 3% to $92 million, including approximately $21 million of incremental merger-related cash costs. Total net leverage reached 2.1x. Axalta projects full-year adjusted EBITDA of $1,100–$1,110 million and adjusted diluted earnings per share of approximately $2.45. Its combination with AkzoNobel remains proposed.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointThird-quarter net sales increased 2% year over year to $1.3 billion.
- Moderate pointMobility Coatings quarterly sales reached a record $493 million, up 7% year over year.
- Moderate pointMobility Coatings adjusted EBITDA reached a third-quarter record $94 million; margin expanded 100 basis points to 19.0%.
- Moderate pointTotal net leverage reached 2.1x, the lowest in Axalta’s history.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Axalta projects low-single-digit full-year 2026 sales growth.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Axalta projects adjusted EBITDA of $254–$264 million for Q4 and $1,100–$1,110 million for full-year 2026.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Axalta projects adjusted diluted EPS of approximately $0.55 for Q4 and approximately $2.45 for full-year 2026.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Axalta projects full-year 2026 free cash flow of approximately $450 million.
- Moderate pointBoth companies’ shareholders approved all merger-related resolutions on August 5, 2026.
7 minor points
- Minor pointCommercial Vehicle sales increased 24% year over year to $119 million, supported by North American volume growth.
- Minor pointLight Vehicle sales increased 2%, primarily driven by favorable currency translation.
- Minor pointIndustrial sales increased 1% year over year to $314 million, primarily from Asia Pacific volume growth.
- Minor pointPerformance Coatings sales rose high single digits in both Latin America and Asia Pacific.
- Minor pointFree cash flow increased 3% year over year to $92 million.
- Minor pointQuarterly net interest expense declined to $37 million from $45 million a year earlier.
- Minor pointNine-month sales increased to $3,911 million from $3,855 million a year earlier.
Negative
- Moderate pointQuarterly net income declined $15 million year over year to $95 million, with a 7.2% margin.
- Moderate pointAdjusted EBITDA declined 4% year over year to $282 million, with a 21.5% margin.
- Moderate pointAdjusted net income fell 6% year over year to $136 million.
- Moderate pointPerformance Coatings adjusted EBITDA declined to $188 million from $211 million; margin fell to 23.0% from 25.5%.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Axalta projects approximately $80 million of merger-related cash costs within full-year 2026 free cash flow. 1.1% of market cap
12 minor points
- Minor pointQuarterly diluted EPS declined to $0.44 from $0.51 a year earlier.
- Minor pointAdjusted diluted EPS declined 6% year over year to $0.63.
- Minor pointPerformance Coatings sales declined $10 million year over year to $818 million.
- Minor pointRefinish sales declined 2% year over year to $504 million, primarily from lower European volumes.
- Minor pointPerformance Coatings North American sales declined low single digits.
- Minor pointQuarterly merger-related expenses increased by $14 million year over year.
- Minor pointQuarterly free cash flow included approximately $21 million of incremental merger-related cash costs.
- Minor pointNine-month net income declined to $275 million from $319 million a year earlier.
- Minor pointNine-month diluted EPS declined to $1.28 from $1.46 a year earlier.
- Minor point. Forward-looking: it has not happened yet and may not happen.Axalta projects full-year 2026 interest expense of approximately $150 million.
- Minor point. Forward-looking: it has not happened yet and may not happen.Axalta projects full-year 2026 capital expenditures of approximately $200 million.
- Minor pointThe AkzoNobel combination remains proposed, rather than completed.
News Explained
At the special meetings, shareholders of Axalta and AkzoNobel voted for all merger-related resolutions on
Details
News Market Reaction – AXTA
On Oct 29, the day this news came out, AXTA closed 2.97% below the previous close.
Data tracked by StockTitan Argus for the Oct 29 session.
Key Figures
- Net sales
- $1,311 million
- Q3 2026; up 2% year over year
- Net income
- $95 million
- Q3 2026; down $15 million year over year
- Adjusted EBITDA
- $282 million
- Q3 2026; down 4% year over year
- Diluted EPS
- $0.44
- Q3 2026; compared with $0.51 in the prior-year period
- Adjusted Diluted EPS
- $0.63
- Q3 2026; down 6% year over year
- Free cash flow
- $92 million
- Q3 2026; up 3% year over year
- Adjusted EBITDA outlook
- $254–$264 million
- Q4 2026 projection
- Adjusted EBITDA outlook
- $1,100–$1,110 million
- FY 2026 projection
Previous Earnings Reports
-
Reported record quarterly Adjusted EBITDA and guided Q3 Adjusted EBITDA above the subsequently reported result.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
adjusted ebitda financial
non-gaap financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
PHILADELPHIA, Oct. 29, 2026 (GLOBE NEWSWIRE) -- Axalta Coating Systems Ltd. (NYSE:AXTA) (“Axalta”), a leading global coatings company, announced its financial results for the third quarter ended September 30, 2026.
Third Quarter 2026 Highlights:
- Net sales of
$1.3 billion , an increase of2% year over year - Record quarter for Mobility net sales
- Net income of
$95 million and net income margin of7.2% - Adjusted EBITDA of
$282 million with an Adjusted EBITDA margin of21.5% - Diluted EPS of
$0.44 - Adjusted Diluted EPS of
$0.63 - Cash provided by operating activities of
$135 million , in line with prior year - Free cash flow of
$92 million , up3% year over year - Total net leverage of 2.1x, the lowest in Axalta’s history
“Axalta delivered another quarter of revenue growth, strong cash generation and robust profitability despite a more challenging operating environment,” said Chris Villavarayan, Chief Executive Officer and President of Axalta. “We maintained Adjusted EBITDA margin above
Third Quarter 2026 Consolidated Financial Results
Third quarter 2026 net sales increased
Net income decreased by
Adjusted EBITDA was
Cash provided by operating activities was
Discussion of Segment Results
Performance Coatings net sales were
Refinish net sales declined
Performance Coatings Adjusted EBITDA was
Mobility Coatings achieved record quarterly net sales of
Mobility Coatings delivered Adjusted EBITDA of
Fourth Quarter and Full Year 2026 Outlook
| (in millions, except %’s and per share data) | Projection | |||
| Item | Q4 2026 | FY 2026 | ||
| Net Sales (YoY % growth) | ~FLAT | LSD% | ||
| Adjusted EBITDA | ||||
| Adjusted Diluted EPS | ~ | ~ | ||
| Free Cash Flow(1) | ~ | |||
| Depreciation and Amortization | ||||
| Tax Rate, As Adjusted | ~ | |||
| Diluted Shares Outstanding | ~215 | |||
| Interest Expense | ~ | |||
| Capital Expenditures | ~ | |||
LSD = low single digit percentage
(1) Includes ~
Axalta does not provide a reconciliation for non-GAAP estimates for Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow or tax rate, as adjusted, on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effort. See “Non-GAAP Financial Measures” for more information.
Conference Call Information
As previously announced, Axalta will hold a conference call to discuss its third quarter 2026 financial results on Thursday, October 29, 2026, at 8:00 a.m. ET. A live webcast of the conference call will be available online at www.axalta.com/investorcall. A replay of the webcast will be posted shortly after the call and will remain accessible through October 29, 2027. The dial-in phone number for the conference call is 1-800-445-7795 and the conference ID is AXALTA. For those unable to participate, a replay will be available through November 5, 2026. The replay dial-in number is +1-844-512-2921. The replay passcode is 11162641.
Cautionary Statement Concerning Forward-Looking Statements
This release may contain certain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 regarding Axalta and its subsidiaries including, but not limited to, our outlook and/or guidance, which includes net sales growth, Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow, depreciation and amortization, tax rate, as adjusted, diluted shares outstanding, interest expense and capital expenditures and statements regarding the proposed merger of equals (the “Proposed Merger”) with Akzo Nobel N.V. (“AkzoNobel”) (including our ability to consummate the Proposed Merger and realize the anticipated benefits thereof). Axalta has identified some of these forward-looking statements with words such as “outlook,” “proposed,” “opportunity,” “confident,” “anticipated,” “momentum,” and “projection,” and the negative of these words or other comparable or similar terminology. All of these statements are based on management’s expectations as well as estimates and assumptions prepared by management that, although they believe to be reasonable, are inherently uncertain. These statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental (including related to any new or existing tariffs imposed by the U.S. and any retaliatory actions from other countries), geopolitical (including the current conflict in the Middle East and related effects on raw material and freight prices, as well as mitigation strategies developed in response thereto) and technological factors outside of Axalta’s control, as well as risks related to the execution of, and assumptions underlying, our tariff mitigation strategies, our capital allocation strategy and future share repurchases, our previously-announced global transformation initiative, our previously-announced three-year 2024-2026 strategy, the Proposed Merger (including our ability to consummate the Proposed Merger and realize the anticipated benefits thereof) and our planned divestiture of our North America Building Products business that may cause its business, industry, strategy, financing activities or actual results to differ materially. More information on potential factors that could affect Axalta’s financial results is available in “Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Axalta’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, and in other documents that we have filed with, or furnished to, the U.S. Securities and Exchange Commission (the “SEC”). More information on these risks, as well as other risks associated with the Proposed Merger, are also discussed in the definitive proxy statement/prospectus relating to the Proposed Merger, which was filed with the SEC on June 24, 2026. Axalta undertakes no obligation to update or revise any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
This release includes financial information that is not presented in accordance with generally accepted accounting principles in the United States (“GAAP”), including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, Free Cash Flow, total net leverage ratio (or “total net leverage”), tax rate, as adjusted, and Adjusted EBIT. Management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, tax rate, as adjusted, and Adjusted EBIT in the analysis of our financial and operating performance because they assist in the evaluation of underlying trends in our business. Management uses Free Cash Flow and total net leverage ratio in the analysis of (1) our liquidity, (2) our ability to incur and service our debt and (3) strategic capital allocation decisions. Adjusted EBITDA, Adjusted Diluted EPS, adjusted net income and Adjusted EBIT consist of EBITDA, Diluted EPS, net income attributable to common shareholders and EBIT, respectively, adjusted for (i) certain non-cash items included within net income, (ii) certain items Axalta does not believe are indicative of ongoing operating performance or (iii) certain nonrecurring, unusual or infrequent items that have not otherwise occurred within the last two years or we believe are not reasonably likely to recur within the next two years. Free Cash Flow consists of cash provided by (used for) operating activities less purchase of property, plant and equipment plus interest proceeds on swaps designated as net investment hedges. Total net leverage ratio consists of net debt divided by Adjusted EBITDA, with net debt defined as total debt less cash and cash equivalents. We believe that making the foregoing adjustments provides investors meaningful information to understand our operating results and ability to analyze financial and business trends on a period-to-period basis. The non-GAAP financial measures used by Axalta may differ from similarly titled measures reported by other companies. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, Free Cash Flow, total net leverage ratio, tax rate, as adjusted, and Adjusted EBIT should not be considered as alternatives to net sales, net income (loss), income (loss) from operations or any other financial measures derived in accordance with GAAP. These non-GAAP financial measures have important limitations as analytical tools and should be considered in conjunction with, and not as substitutes for, our results as reported under GAAP. This release includes a reconciliation of certain non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP. Axalta does not provide a reconciliation for Adjusted EBITDA, Adjusted Diluted EPS, tax rate, as adjusted, or Free Cash Flow on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effort. For example, such reconciling items include the impact of foreign currency exchange gains or losses, gains or losses that are unusual or nonrecurring in nature, as well as discrete taxable events. These items are uncertain, depend on various factors and may have a substantial and unpredictable impact on our GAAP results.
Segment Financial Measures
The primary measure of segment operating performance is Adjusted EBITDA, which is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts and prior year financial results and that management believes reflects Axalta’s core operating performance. As we do not measure segment operating performance based on net income, a reconciliation of this non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP is not available.
Defined Terms
All capitalized terms contained within this release that are not otherwise defined herein have been previously defined in our filings with the SEC.
Rounding
Certain amounts may not foot or crossfoot due to rounding. Additionally, certain percentages may not recalculate due to rounding.
General Restrictions
This communication is not for release, publication, or distribution, in whole or in part, in or into, directly or indirectly, any jurisdiction in which such release, publication, or distribution would be unlawful.
This communication is not a prospectus and the information in this communication is not intended to be complete. This communication is for informational purposes only and is not intended to be and shall not constitute a solicitation of any vote or approval, or an offer to buy or sell, or the solicitation of an offer to buy or sell, any securities, or an invitation or recommendation to subscribe for, acquire or buy securities of Axalta or AkzoNobel or any other financial products or securities, in any place or jurisdiction, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended (the “Securities Act”).
Any decision to purchase, subscribe for, otherwise acquire, sell or otherwise dispose of any securities must be made only on the basis of the information contained in and incorporated by reference into the prospectus with respect to the shares to be allotted by AkzoNobel in the Proposed Merger, which was published on June 24, 2026 and supplemented on July 22, 2026.
The distribution of this communication may, in some countries, be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions. To the fullest extent permitted by applicable law, Axalta and AkzoNobel disclaim any responsibility or liability for the violation of any such restrictions by any person. Neither Axalta, nor AkzoNobel, nor any of their advisors assume any responsibility for any violation by any person of any of these restrictions. Shareholders of Axalta and AkzoNobel, respectively, with any doubt as to their position should consult an appropriate professional advisor without delay.
This communication is addressed to and directed only at (i) persons who are outside the United Kingdom, (ii) persons having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”), (iii) persons falling within Article 49(2)(a) to (d) of the Order, or (iv) persons to whom it may otherwise lawfully be communicated pursuant to the Order (all such persons together being referred to as, “Relevant Persons”). This communication is directed only at Relevant Persons. Other persons should not act or rely on this communication or any of its contents. Any investment or investment activity to which this communication relates is available only to Relevant Persons and will be engaged in only with such persons. Solicitations resulting from this communication will only be responded to if the person concerned is a Relevant Person.
Additional Information and Where to Find It
In connection with the Proposed Merger between Axalta and AkzoNobel, AkzoNobel filed with the SEC a registration statement on Form F-4 on May 27, 2026, as amended on June 18, 2026, which included a proxy statement of Axalta that also constitutes a prospectus with respect to the shares to be offered by AkzoNobel in the Proposed Merger. The registration statement was declared effective by the SEC on June 23, 2026. In connection with the proposed transaction, on June 24, 2026, Axalta filed with the SEC a definitive proxy statement and, on or about June 24, 2026, Axalta commenced mailing the definitive proxy statement to its holders of record as of June 11, 2026. On August 5, 2026, shareholders at the Extraordinary General Meeting of AkzoNobel and the Special General Meeting of Axalta, respectively, voted in favor of all resolutions related to the Proposed Merger. Each of Axalta and AkzoNobel will also file other relevant documents in connection with the Proposed Merger. This communication is not a substitute for any registration statement, proxy statement/prospectus or other documents Axalta and/or AkzoNobel may file with the SEC or any other competent regulator in connection with the Proposed Merger. This communication does not contain all the information that should be considered concerning the Proposed Merger and is not intended to form the basis of any investment decision or any other decision in respect of the Proposed Merger. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS, STOCKHOLDERS AND SHAREHOLDERS OF AXALTA AND AKZONOBEL ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE PROXY STATEMENT/PROSPECTUS, AS APPLICABLE, AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, IN CONNECTION WITH THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE, AS THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT AXALTA, AKZONOBEL, THE PROPOSED TRANSACTION AND RELATED MATTERS. The registration statement and proxy statement/prospectus and other relevant documents filed by Axalta and AkzoNobel with the SEC are available free of charge at the SEC’s website at www.sec.gov. In addition, investors and shareholders will be able to obtain free copies of the proxy statement/prospectus and other documents filed with the SEC from Axalta’s investor relations webpage at https://ir.axalta.com/sec-filings/all-sec-filings or from AkzoNobel’s investor relations webpage at https://www.akzonobel.com/en/investors/all-sec-filings.
The contents of this communication should not be construed as financial, legal, business, investment, tax or other professional advice. Each recipient should consult with its own professional advisors for any such matter and advice
About Axalta Coating Systems
Axalta is a global leader in the coatings industry, providing customers with innovative, colorful, beautiful and sustainable coatings solutions. From light vehicles, commercial vehicles and refinish applications to electric motors, building facades and other industrial applications, our coatings are designed to prevent corrosion, increase productivity and enhance durability. With more than 150 years of experience in the coatings industry, the global team at Axalta continues to find ways to serve our more than 100,000 customers in over 140 countries better every day with the finest coatings, application systems and technology. For more information visit axalta.com and follow us @axalta on X.
| Financial Statement Tables | |||||||||||||||
| AXALTA COATING SYSTEMS LTD. | |||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||
| (In millions, except per share data) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net sales | $ | 1,311 | $ | 1,288 | $ | 3,911 | $ | 3,855 | |||||||
| Cost of goods sold | 877 | 838 | 2,596 | 2,515 | |||||||||||
| Selling, general and administrative expenses | 201 | 197 | 614 | 607 | |||||||||||
| Other operating charges | 24 | 6 | 92 | 32 | |||||||||||
| Research and development expenses | 18 | 18 | 54 | 55 | |||||||||||
| Amortization of acquired intangibles | 26 | 25 | 77 | 73 | |||||||||||
| Income from operations | 165 | 204 | 478 | 573 | |||||||||||
| Interest expense, net | 37 | 45 | 112 | 134 | |||||||||||
| Other expense (income), net | — | 4 | (1 | ) | 12 | ||||||||||
| Income before income taxes | 128 | 155 | 367 | 427 | |||||||||||
| Provision for income taxes | 33 | 45 | 92 | 108 | |||||||||||
| Net income | 95 | 110 | 275 | 319 | |||||||||||
| Less: Net income attributable to noncontrolling interests | — | — | 1 | 1 | |||||||||||
| Net income attributable to common shareholders | $ | 95 | $ | 110 | $ | 274 | $ | 318 | |||||||
| Basic net income per share | $ | 0.44 | $ | 0.51 | $ | 1.28 | $ | 1.47 | |||||||
| Diluted net income per share | $ | 0.44 | $ | 0.51 | $ | 1.28 | $ | 1.46 | |||||||
| Basic weighted average shares outstanding | 214.0 | 215.0 | 213.9 | 216.9 | |||||||||||
| Diluted weighted average shares outstanding | 215.1 | 215.9 | 214.8 | 217.9 | |||||||||||
| AXALTA COATING SYSTEMS LTD. | |||||||
| Condensed Consolidated Balance Sheets (Unaudited) | |||||||
| (In millions, except per share data) | |||||||
| September 30, 2026 | December 31, 2025 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 650 | $ | 657 | |||
| Restricted cash | 6 | 3 | |||||
| Accounts and notes receivable, net | 1,366 | 1,229 | |||||
| Inventories | 849 | 756 | |||||
| Prepaid expenses and other current assets | 192 | 170 | |||||
| Total current assets | 3,063 | 2,815 | |||||
| Property, plant and equipment, net | 1,319 | 1,299 | |||||
| Goodwill | 1,762 | 1,795 | |||||
| Identifiable intangibles, net | 1,056 | 1,147 | |||||
| Other assets | 547 | 543 | |||||
| Total assets | $ | 7,747 | $ | 7,599 | |||
| Liabilities, Shareholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 780 | $ | 637 | |||
| Current portion of borrowings | 519 | 20 | |||||
| Other accrued liabilities | 701 | 712 | |||||
| Total current liabilities | 2,000 | 1,369 | |||||
| Long-term borrowings | 2,476 | 3,179 | |||||
| Accrued pensions | 225 | 238 | |||||
| Deferred income taxes | 182 | 171 | |||||
| Other liabilities | 198 | 249 | |||||
| Total liabilities | 5,081 | 5,206 | |||||
| Shareholders’ equity: | |||||||
| Common shares, | 256 | 255 | |||||
| Capital in excess of par | 1,637 | 1,621 | |||||
| Retained earnings | 2,329 | 2,055 | |||||
| Treasury shares, at cost, 41.7 shares at both September 30, 2026 and December 31, 2025 | (1,202 | ) | (1,202 | ) | |||
| Accumulated other comprehensive loss | (400 | ) | (383 | ) | |||
| Total Axalta shareholders’ equity | 2,620 | 2,346 | |||||
| Noncontrolling interests | 46 | 47 | |||||
| Total shareholders’ equity | 2,666 | 2,393 | |||||
| Total liabilities and shareholders’ equity | $ | 7,747 | $ | 7,599 | |||
| AXALTA COATING SYSTEMS LTD. | ||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| (In millions) | ||||||||
| Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 275 | $ | 319 | ||||
| Adjustment to reconcile net income to cash provided by operating activities: | ||||||||
| Depreciation and amortization | 233 | 218 | ||||||
| Amortization of deferred financing costs and original issue discount | 6 | 6 | ||||||
| Deferred income taxes | 24 | 28 | ||||||
| Realized and unrealized foreign exchange (gains) losses, net | (8 | ) | 31 | |||||
| Stock-based compensation | 23 | 19 | ||||||
| Interest income on swaps designated as net investment hedges | (9 | ) | (9 | ) | ||||
| Other non-cash, net | (2 | ) | 8 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Trade accounts and notes receivable | (132 | ) | (48 | ) | ||||
| Inventories | (99 | ) | (53 | ) | ||||
| Prepaid expenses and other assets | (75 | ) | (132 | ) | ||||
| Accounts payable | 146 | (15 | ) | |||||
| Other accrued liabilities | 2 | (71 | ) | |||||
| Other liabilities | (29 | ) | 4 | |||||
| Cash provided by operating activities | 355 | 305 | ||||||
| Investing activities: | ||||||||
| Acquisitions, net of cash acquired | (8 | ) | (6 | ) | ||||
| Purchase of property, plant and equipment | (144 | ) | (138 | ) | ||||
| Interest proceeds on swaps designated as net investment hedges | 9 | 9 | ||||||
| Proceeds received on loans to customers | 8 | 6 | ||||||
| Other investing activities, net | (3 | ) | 7 | |||||
| Cash used for investing activities | (138 | ) | (122 | ) | ||||
| Financing activities: | ||||||||
| Payments on long-term borrowings | (211 | ) | (25 | ) | ||||
| Purchases of common stock | — | (165 | ) | |||||
| Net cash flows associated with stock-based awards | (7 | ) | (3 | ) | ||||
| Other financing activities, net | (3 | ) | (2 | ) | ||||
| Cash used for financing activities | (221 | ) | (195 | ) | ||||
| Decrease in cash | (4 | ) | (12 | ) | ||||
| Effect of exchange rate changes on cash | — | 26 | ||||||
| Cash at beginning of period | 660 | 596 | ||||||
| Cash at end of period | $ | 656 | $ | 610 | ||||
| Cash at end of period reconciliation: | ||||||||
| Cash and cash equivalents | $ | 650 | $ | 606 | ||||
| Restricted cash | 6 | 4 | ||||||
| Cash at end of period | $ | 656 | $ | 610 | ||||
The following table reconciles net income to EBITDA, Adjusted EBITDA and segment Adjusted EBITDA for the periods presented (in millions):
| Three Months Ended September 30, | Twelve | Nine Months Ended September 30, | |||||||||||||||||||||
| 2026 | 2025 | Months Ended September 30, 2026 | 2026 | 2025 | Year Ended December 31, 2025 | ||||||||||||||||||
| Net income | $ | 95 | $ | 110 | $ | 335 | $ | 275 | $ | 319 | $ | 379 | |||||||||||
| Interest expense, net | 37 | 45 | 154 | 112 | 134 | 176 | |||||||||||||||||
| Provision for income taxes | 33 | 45 | 151 | 92 | 108 | 167 | |||||||||||||||||
| Depreciation and amortization | 81 | 74 | 310 | 233 | 218 | 295 | |||||||||||||||||
| EBITDA | 246 | 274 | 950 | 712 | 779 | 1,017 | |||||||||||||||||
| Termination benefits and other employee-related costs (a) | 5 | 2 | 12 | 11 | 22 | 23 | |||||||||||||||||
| Merger and acquisition-related costs (b) | 19 | 5 | 97 | 76 | 11 | 32 | |||||||||||||||||
| Site closure costs (c) | 1 | 1 | 5 | 5 | 6 | 6 | |||||||||||||||||
| Foreign exchange remeasurement losses (d) | 2 | 4 | 11 | 7 | 11 | 15 | |||||||||||||||||
| Long-term employee benefit plan adjustments (e) | 3 | 3 | 14 | 11 | 9 | 12 | |||||||||||||||||
| Stock-based compensation (f) | 8 | 6 | 29 | 23 | 19 | 25 | |||||||||||||||||
| Gains on sales of assets (g) | — | (5 | ) | (1 | ) | — | (5 | ) | (6 | ) | |||||||||||||
| Other adjustments (h) | (2 | ) | 4 | 1 | 1 | 4 | 4 | ||||||||||||||||
| Adjusted EBITDA | $ | 282 | $ | 294 | $ | 1,118 | $ | 846 | $ | 856 | $ | 1,128 | |||||||||||
| Net sales | $ | 1,311 | $ | 1,288 | $ | 5,173 | $ | 3,911 | $ | 3,855 | $ | 5,117 | |||||||||||
| Net income margin | 7.2 | % | 8.5 | % | 6.5 | % | 7.0 | % | 8.3 | % | 7.4 | % | |||||||||||
| Adjusted EBITDA margin | 21.5 | % | 22.8 | % | 21.6 | % | 21.6 | % | 22.2 | % | 22.0 | % | |||||||||||
| Segment Adjusted EBITDA: | |||||||||||||||||||||||
| Performance Coatings | $ | 188 | $ | 211 | $ | 766 | $ | 586 | $ | 608 | $ | 788 | |||||||||||
| Mobility Coatings | 94 | 83 | 352 | 260 | 248 | 340 | |||||||||||||||||
| Total | $ | 282 | $ | 294 | $ | 1,118 | $ | 846 | $ | 856 | $ | 1,128 | |||||||||||
| (a) | Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. We do not consider these amounts indicative of our ongoing operating performance. |
| (b) | Represents merger and acquisition-related expenses, including costs related to financial, tax and legal advisory services, associated with both consummated and unconsummated transactions, all of which we do not consider indicative of our ongoing operating performance. |
| (c) | Represents costs related to the closure of certain manufacturing sites, including impairment charges, which we do not consider indicative of our ongoing operating performance. |
| (d) | Represents foreign exchange losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, net of the impacts of our foreign currency instruments used to hedge our balance sheet exposures. |
| (e) | Represents the non-cash, non-service cost components of long-term employee benefit costs. |
| (f) | Represents non-cash impacts associated with stock-based compensation. |
| (g) | Represents non-recurring income related to the sales of certain fixed assets, which are not considered indicative of our ongoing performance. |
| (h) | Represents (benefits) costs for certain non-operational or non-cash (gains) losses, net, unrelated to our core business and which we do not consider indicative of our ongoing operating performance. |
The following table reconciles net income to adjusted net income for the periods presented (in millions, except per share data):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net income | $ | 95 | $ | 110 | $ | 275 | $ | 319 | |||||||
| Less: Net income attributable to noncontrolling interests | — | — | 1 | 1 | |||||||||||
| Net income attributable to common shareholders | 95 | 110 | 274 | 318 | |||||||||||
| Termination benefits and other employee-related costs (a) | 5 | 2 | 11 | 22 | |||||||||||
| Merger and acquisition-related costs (b) | 19 | 5 | 76 | 11 | |||||||||||
| Accelerated depreciation and site closure costs (c) | 1 | 1 | 5 | 8 | |||||||||||
| Other adjustments (d) | (2 | ) | (2 | ) | 2 | (1 | ) | ||||||||
| Amortization of acquired intangibles (e) | 26 | 25 | 77 | 73 | |||||||||||
| Total adjustments | 49 | 31 | 171 | 113 | |||||||||||
| Income tax provision impacts (f) | 8 | (3 | ) | 36 | 19 | ||||||||||
| Adjusted net income | $ | 136 | $ | 144 | $ | 409 | $ | 412 | |||||||
| Adjusted diluted net income per share | $ | 0.63 | $ | 0.67 | $ | 1.91 | $ | 1.89 | |||||||
| Diluted weighted average shares outstanding | 215.1 | 215.9 | 214.8 | 217.9 | |||||||||||
| (a) | Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. We do not consider these amounts indicative of our ongoing operating performance. |
| (b) | Represents merger and acquisition-related expenses, including costs related to financial, tax and legal advisory services, associated with both consummated and unconsummated transactions, all of which we do not consider indicative of our ongoing operating performance. |
| (c) | Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments and costs related to the closure of certain manufacturing sites, including impairment charges, which we do not consider indicative of our ongoing operating performance. |
| (d) | Represents (benefits) costs for certain non-operational or non-cash (gains) losses, net, unrelated to our core business and which we do not consider indicative of our ongoing operating performance. |
| (e) | Represents non-cash amortization expense for intangible assets acquired through business combinations or asset acquisitions. |
| (f) | The income tax impacts are determined using the applicable rates in the taxing jurisdictions in which expense or income occurred and includes both current and deferred income tax expense (benefit) based on the nature of the non-GAAP performance measure. Additionally, the income tax impact includes the removal of discrete income tax impacts within our effective tax rate which were benefits of |
The following table reconciles cash provided by operating activities to free cash flow for the periods presented (in millions):
| Three Months Ended March 31, | Three Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||
| Cash provided by operating activities | $ | 68 | $ | 26 | $ | 152 | $ | 142 | $ | 135 | $ | 137 | $ | 355 | $ | 305 | |||||||||||||||
| Purchase of property, plant and equipment | (50 | ) | (43 | ) | (48 | ) | (45 | ) | (46 | ) | (50 | ) | (144 | ) | (138 | ) | |||||||||||||||
| Interest proceeds on swaps designated as net investment hedges | 3 | 3 | 3 | 4 | 3 | 2 | 9 | 9 | |||||||||||||||||||||||
| Free cash flow | $ | 21 | $ | (14 | ) | $ | 107 | $ | 101 | $ | 92 | $ | 89 | $ | 220 | $ | 176 | ||||||||||||||
The following table reconciles income from operations to adjusted EBIT for the periods presented (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Income from operations | $ | 165 | $ | 204 | $ | 478 | $ | 573 | |||||||
| Other expense (income), net | — | 4 | (1 | ) | 12 | ||||||||||
| Total | 165 | 200 | 479 | 561 | |||||||||||
| Termination benefits and other employee-related costs (a) | 5 | 2 | 11 | 22 | |||||||||||
| Merger and acquisition-related costs (b) | 19 | 5 | 76 | 11 | |||||||||||
| Accelerated depreciation and site closure costs (c) | 1 | 1 | 5 | 8 | |||||||||||
| Other adjustments (d) | (2 | ) | (2 | ) | 2 | (1 | ) | ||||||||
| Amortization of acquired intangibles (e) | 26 | 25 | 77 | 73 | |||||||||||
| Adjusted EBIT | $ | 214 | $ | 231 | $ | 650 | $ | 674 | |||||||
| (a) | Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. We do not consider these amounts indicative of our ongoing operating performance. |
| (b) | Represents merger and acquisition-related expenses, including costs related to financial, tax and legal advisory services, associated with both consummated and unconsummated transactions, all of which we do not consider indicative of our ongoing operating performance. |
| (c) | Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments and costs related to the closure of certain manufacturing sites, including impairment charges, which we do not consider indicative of our ongoing operating performance. |
| (d) | Represents (benefits) costs for certain non-operational or non-cash (gains) losses, net, unrelated to our core business and which we do not consider indicative of our ongoing operating performance. |
| (e) | Represents non-cash amortization expense for intangible assets acquired through business combinations or asset acquisitions. |
| Investor Contact Colleen Lubic D +1 610-999-9407 Colleen.Lubic@axalta.com | Media Contact media-relations@axalta.com |
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were Axalta’s third-quarter 2026 sales and earnings?
Axalta reported $1.3 billion in sales and $95 million in net income for the quarter ended September 30, 2026. Sales increased 2% year over year, while net income decreased by $15 million. Diluted earnings per share were $0.44, compared with $0.51 a year earlier.
What is Axalta’s full-year 2026 outlook?
Axalta projects low-single-digit sales growth, adjusted EBITDA of $1,100–$1,110 million, and adjusted diluted earnings per share of approximately $2.45 for full-year 2026. Its approximately $450 million free cash flow projection includes approximately $80 million of merger-related cash costs.