Axalta Reports $1.3 Billion in Second Quarter Sales

Adjusted EBITDA sets new quarterly record.

Axalta Coating Systems Ltd. (NYSE: AXTA) reported net sales of $1.3 billion for the quarter ended June 30, down 3% year-over-year, primarily due to volume declines in its Performance Coatings segment that more than offset contributions from the CoverFlexx acquisition and favorable currency translation.

Net income decreased by 3% year over year to $110 million compared to $113 million in the prior year period resulting in a net income margin of 8.4%. The decrease was largely due to costs from restructuring programs initiated in the quarter designed to drive efficiencies, partially offset by a decline in operating expenses and lower interest and tax expense. Adjusted net income improved by $4 million year over year to $139 million driven by lower operating expenses, reduced interest expense and improved variable costs.

Adjusted EBITDA was a new quarterly record of $292 million, an increase of $1 million year over year, and Adjusted EBITDA margin expanded by 90 basis points year over year to 22.4%. Diluted earnings per share decreased by 2% to $0.50 compared to $0.51 in the prior year period, while adjusted diluted earnings per share improved by 5% to $0.64.

The company achieved its fifth consecutive quarter with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margins at or above its 21% target, reaching 22.4%.

“We delivered another excellent quarter, setting new records for Adjusted EBITDA and Adjusted Diluted EPS,” said Chris Villavarayan, CEO and President of Axalta. “Our performance reflects Axalta’s drive for operational excellence, and our commitment to meet financial targets and create value through our A Plan objectives.”

Performance Coating Segment

Performance Coatings second quarter 2025 net sales were $836 million, compared to $887 million in the prior year period. Contributions from the CoverFlexx acquisition and favorable currency impacts helped partially offset the decline in organic net sales.

Refinish net sales declined 6% year-over-year to $514 million, with organic sales down high single digits.

The company attributes the refinish market weakness to a disconnect between collision frequency and insurance claims. While actual vehicle accidents declined only low single digits, insurance claims dropped significantly more as consumers delayed repairs due to elevated costs.

“Claims reported through Q1 remain meaningful lower in the United States and slightly down in Europe,” Villavarayan explained during the company’s earnings call with the investment commmunity. “We believe that factors such as elevated repair costs, rising insurance premiums, and broader inflationary pressures have discouraged consumers from seeking repairs, resulting in fewer claims. Despite steady or just slightly declining collision rates in the second quarter, refinish volumes were impacted by expected headwinds, including consumer pull back on repairs and elevated North American distributor inventories. ”

“Insurance premium inflation in the US appears to be abating,” Villavarayan noted. “One additional recent data point that is encouraging came from LexisNexis, and indicates that nearly half of consumers are actively seeking lower insurance options by switching carriers, many successfully obtaining significant reductions in their premiums.”

Despite market challenges, Axalta continued gaining market share, adding approximately 1,600 net new body shops year-to-date in 2025, building on more than 2,800 net wins in 2024. The company reported particular success in the mainstream and economy segments, achieving a record number of wins in these areas during the second quarter.

Despite near-term headwinds, the company remains confident in its strategic positioning. Axalta plans to roll out its Nimbus digital platform to 40,000 body shops in 2026, which the company believes will improve customer efficiency and strengthen relationships.

Outlook and Guidance

For the third quarter, Axalta expects net sales to decline low single digits compared to the prior year, with adjusted EBITDA projected between $290 million and $300 million. The company revised its full-year 2025 guidance slightly lower, now expecting net sales between $5.2 billion and $5.275 billion and adjusted diluted earnings per share in the range of $2.45 to $2.55.

“Based on the latest industry indicators and consumer sentiment data, we now believe that the softer demand environment observed in the first half of the year will persist longer than anticipated,” Villavarayan said.