10-Q · April 30, 2026
Axalta's Q1 2026 earnings reflect a slight revenue decline of 0.6% year-over-year to $1.25 billion, driven mainly by lower sales volumes. Despite beating Adjusted EBITDA expectations, the diluted EPS fell to $0.42,…
Earnings analysis · 10-Q
AXTA earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Axalta posted Q2 revenue of $1.346 billion, up 3.1% year over year and 7.7% sequentially from $1.250 billion, but organic conditions remained soft: company volume declined 0.8% and foreign exchange supplied a 2.6% sales…
Read full summary
Axalta posted Q2 revenue of $1.346 billion, up 3.1% year over year and 7.7% sequentially from $1.250 billion, but organic conditions remained soft: company volume declined 0.8% and foreign exchange supplied a 2.6% sales benefit. Gross margin fell 50 bps year over year to 34.5%, while estimated GAAP operating margin declined to 12.4% from approximately 14.8%, with $42 million of other operating charges materially affecting profitability. Performance Coatings delivered strong margin expansion, whereas Mobility margin and EBITDA declined; cash generation improved, but $500 million of notes mature in June 2027.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.41
What stood out
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Revenue grew 3.1% year over year
Q2 net sales were $1.346 billion, up $41 million, or 3.1%, from $1.305 billion a year earlier. Sales also rose from $1.250 billion in Q1 2026, though the filing attributes year-to-date growth chiefly to currency and acquisitions rather than organic volume.
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Performance Coatings drove profit growth
Performance Coatings delivered $872 million of sales, up $36 million or 4.3%, and Adjusted EBITDA rose $18 million to $218 million. Segment Adjusted EBITDA margin expanded to 25.1% from 23.8%, supported by price/mix, savings initiatives and lower variable input costs.
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Operating cash flow improved $52 million
Six-month operating cash flow increased to $220 million from $168 million. Capital expenditures were $98 million, or 3.8% of $2.600 billion of six-month sales, producing calculated free cash flow of $122 million versus $80 million a year earlier.
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Liquidity remained substantial
Liquidity included $633 million of cash and $768 million of revolver availability at June 30, 2026, with only $32 million of letters of credit outstanding. The company also prepaid $125 million of its 2029 Dollar Term Loans during the first half.
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Refinish and commercial vehicle outperformed
Refinish sales increased 6.1% to $545 million and Commercial Vehicle sales increased 6.5% to $114 million in Q2. These gains offset a 0.7% decline in Light Vehicle sales to $360 million.
What to watch
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Gross margin contracted 50 basis points
Gross margin declined to 34.5% from 35.0% a year earlier as cost of sales rose 3.9% to $881 million, faster than the 3.1% sales increase. Management cited weaker fixed-cost absorption from lower volumes and higher freight costs.
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Merger costs weighed on GAAP earnings
GAAP operating margin was 12.4%, down from approximately 14.8% a year ago, and GAAP diluted EPS was $0.41 versus $0.50 in Q2 2025. Other operating charges rose to $42 million from $12 million, including a $31 million increase in merger-and-acquisition-related costs.
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Mobility profitability declined
Mobility Coatings Adjusted EBITDA fell $5 million to $87 million and margin declined to 18.4% from 19.8%. The segment reported a 1.6% volume decline and a 1.5% unfavorable price/mix effect during Q2, principally tied to light-vehicle demand.
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Seasonal working-capital use remains elevated
Working-capital outflows absorbed $148 million in the first half, including increases of $109 million in receivables, $58 million in prepaid expenses and other assets, and $53 million in inventory. Accounts payable increased $139 million, partly offsetting those uses.
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$500 million note refinancing is pending
The company intentionally left $500 million of 4.750% 2027 Dollar Senior Notes classified as a current liability and expects to repay or refinance them by their June 15, 2027 maturity. Refinancing terms could be pressured by its leveraged capital structure and interest-rate conditions.
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No formal risk-factor updates
Item 1A states there were no material changes to risk factors from the 2025 Form 10-K. Nonetheless, the filing specifically flags the Middle East conflict and potential effects on commodity, transportation and utility costs across its 42 manufacturing facilities.
Management's outlook
The 10-Q contains no quantitative earnings or revenue guidance. Management states that, based on its forecasts, operating cash flow, cash on hand and existing borrowing capacity should adequately fund debt service, liquidity needs and necessary capital expenditures for the next 12 months; the earnings-release outlook is not repeated in this filing.
Earlier filings 4
10-K · February 13, 2026
Axalta’s 2025 10-K highlights an all‑stock merger agreement with AkzoNobel announced in November 2025 while describing a stable two‑segment strategy (Performance and Mobility) driven by proprietary color‑matching…
10-Q · October 29, 2025
Axalta reported Q3 net sales of $1,288 million (down $32 million vs. Q3 2024) with income from operations of $204 million (up $11 million). Net income was $110 million and diluted EPS was $0.51, both higher than the…
10-Q · July 30, 2025
Axalta reported Q2 net sales of $1,305 million (down $46 million vs. Q2 2024) with gross margin at 35.0% and operating income of $193 million. Diluted EPS was $0.50. On a six‑month basis, net income and operating income…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.