We set records for adjusted EBITDA, which increased 5% from the prior period to $305 million. Adjusted diluted EPS, which improved 13% year-over-year to $0.72, exceeding our expectations, and we had the lowest net leverage in Axalta's history. Also notable is net sales growth of 3% year-over-year and an excellent adjusted EBITDA margin of 22.7%, up 30 basis points from the prior year period and the highest second quarter in many years. We delivered $152 million in cash from operations and $107 million in free cash flow, an improvement of 6% year-over-year.

The Axalta team has driven growth, controlled the controllables, and significantly improved the balance sheet. Europe, our largest Refinish region, delivered a record quarter for net sales. This represents excellent wins for Axalta and further reinforce our growth momentum. In Industrial, we're far outperforming our expectations for profitability with 13 quarters of adjusted EBITDA margin expansion, despite the choppy macro environment in North America.

In Asia, we have delivered six consecutive quarters of net sales growth driven by higher demand for Energy Solutions, and in Europe, we have posted another quarter of volume growth. In Mobility, we delivered a record quarter in net sales of $474 million, including record quarterly sales in commercial vehicle. Our commercial transportation solutions business continues to perform exceptionally well at record levels, and we're benefiting from the ramp-up in Class 8 production in North America. We are equally pleased with the consistency and profitability of the Mobility segment, which delivered an adjusted EBITDA margin of 18.4%.

What went well
  • Record second-quarter adjusted EBITDA of $305 million (up 5% year-over-year) at a 22.7% margin (up 30 bps), the highest second-quarter margin in a decade
  • Adjusted diluted EPS of $0.72, up 13% year-over-year and a quarterly record
  • Net sales up 3% year-over-year to just under $1.35 billion, the highest quarterly sales in two years; adjusted net income (ex-merger costs) up 10% to $153 million
  • Operating cash flow of $152 million and free cash flow of $107 million (up 7% and 6%); first-half operating cash flow up 31%
  • Lowest net leverage in company history at 2.2x; gross debt down $80 million in the quarter ($135 million year-to-date); first-half interest expense down 16%
  • Refinish net sales up 6% (Europe posted a record quarter); more than 1,900 net new body shops in the first half plus about 800 North American MSO locations won in July
  • Performance Coatings adjusted EBITDA up 10% to $218 million with margin up 130 bps to 25.1%; Industrial posted a 13th straight quarter of margin expansion
  • Mobility set a record second-quarter net sales of $474 million with record commercial-vehicle sales as North America Class 8 production ramps; margin of 18.4%
  • Eighth consecutive quarter of lower operating expenses (constant currency); variable costs down nearly 2%
  • AkzoNobel merger vote set for August 5, on track to close late 2026 or early 2027, with $600 million synergies reaffirmed (about 90% captured within three years)
What went wrong
  • Net income fell $21 million to $89 million on an incremental $31 million of AkzoNobel transaction-related costs
  • Light Vehicle net sales declined slightly as lower volumes offset favorable foreign currency and Latin America growth
  • Mobility adjusted EBITDA comparison was hurt by favorable one-time items in the prior-year quarter that did not repeat
  • North America Industrial demand remained challenged
  • Maintained rather than raised full-year guidance, citing Iran, tariffs and broader Middle East geopolitical uncertainty
  • Third-quarter 2026 guidance implies only low-single-digit sales growth and adjusted EPS of about $0.70 (up 4%)

More on Axalta Coating Systems Ltd.

Reported 2026-07-28 · figures from the Axalta Coating Systems Ltd. Q2 2026 earnings call.

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