In the quarter, we generated net sales of $1.25 billion, Adjusted EBITDA of $259 million and adjusted diluted EPS of $0.56, which came in 12% above expectations. With $68 million of cash from operations and $21 million of free cash flow, an improvement of $35 million year-over-year. We're closely monitoring developments across energy, logistics, and the broader supply and demand landscape as it relates to the evolving situation in the Middle East. In Mobility, more than 50% of our revenue is now tied to raw material indices, which provides a natural hedge against cost volatility.

Even amid top-line pressure, our Adjusted EBITDA margins have exceeded 20% for nine consecutive quarters, underscoring the durability of our operating model. In Refinish, net body shop wins increased 10% year-over-year and generated net sales growth in the first quarter in three out of our four regions. In Mobility, we delivered record net sales in the first quarter of $452 million and growth in three out of our four regions. Commercial Transportation Solutions, which was a bright spot in 2025, also delivered record first quarter sales, driven by continued success with new business wins.

Gross margin was 33%, down slightly from last year, driven primarily by unfavorable mix from lower volumes in North America. Adjusted EBITDA in the quarter was $259 million, resulting in an adjusted EBITDA margin of 20.6%. Adjusted diluted earnings per share was $0.56, exceeding our outlook by 12%, supported by lower interest expense and stronger overall earnings in the quarter. Cash provided by operating activities was $68 million, a company first quarter record.

What went well
  • Beat expectations with adjusted diluted EPS of $0.56, 12% above outlook, on net sales of $1.254 billion and adjusted EBITDA of $259 million (20.6% margin)
  • Set first-quarter records for operating cash flow of $68 million (up $42 million year-over-year) and free cash flow of $21 million (up $35 million)
  • Adjusted EBITDA margins have now exceeded 20% for nine consecutive quarters
  • Industrial delivered its 12th consecutive quarter of year-over-year profitability improvement; Asia posted a fifth straight quarter of net-sales growth
  • Mobility set a first-quarter net-sales record of $452 million (up 3%), with adjusted EBITDA of $79 million and margin up 100 bps to 17.5%
  • Refinish stabilized near $500 million with net body-shop wins up 10% year-over-year and growth in three of four regions
  • Won six Business Intelligence Group Innovation Awards and three Edison Awards (two Gold, one Bronze)
  • Repaid $54 million of gross debt, ending at 2.3x net leverage; interest expense down 14% year-over-year; roughly 60% of direct spend under contract
  • Merger with AkzoNobel progressing on schedule; $600 million run-rate synergies reaffirmed with shareholder votes expected by early July
What went wrong
  • Net sales declined 1% year-over-year on lower Performance Coatings volumes; gross margin of 33% was down slightly on unfavorable North America mix
  • Net income fell $8 million to $91 million, driven by $22 million of AkzoNobel transaction costs
  • Performance Coatings net sales down 2% to $802 million; adjusted EBITDA down to $180 million with margin off 170 bps to 22.4%
  • Refinish net sales down 3% to $498 million on lower claims and shifting order patterns; Industrial down 2% to $304 million
  • China Mobility sales declined in line with lower regional auto production
  • Now tracking toward the lower end of full-year adjusted EBITDA and EPS guidance given current demand signals
  • Lowered the global light-vehicle build assumption to about 91 million units (from 92 million)
  • Middle East and Iran geopolitical tensions cited as raising second-half uncertainty on energy prices, inflation and consumer demand

More on Axalta Coating Systems Ltd.

Reported 2026-04-30 · figures from the Axalta Coating Systems Ltd. Q1 2026 earnings call.

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