Axalta Releases Third Quarter 2025 Results

Core Insights - Axalta Coating Systems Ltd. reported strong financial results for Q3 2025, achieving record Adjusted EBITDA and Adjusted Diluted EPS, reflecting operational excellence despite macroeconomic challenges [3][4]. Financial Performance - Net sales for Q3 2025 decreased by 2% year-over-year to $1.3 billion, with favorable foreign currency translation and organic net sales in Mobility partially offsetting declines in Performance Coatings [4]. - Net income increased by $8 million year-over-year to $110 million, resulting in a net income margin of 8.5%, an increase of 80 basis points compared to the previous year [5]. - Adjusted EBITDA reached a record $294 million, up $3 million year-over-year, with an Adjusted EBITDA margin expanding by 70 basis points to 22.8% [5][9]. - Diluted EPS increased by 11% to $0.51, while adjusted diluted EPS improved by 6% to $0.67, primarily due to lower interest expense and a reduction in shares outstanding [5][9]. Segment Results - Performance Coatings reported net sales of $828 million, down from $877 million in the prior-year period, with a decline in Refinish net sales by 7% year-over-year [7]. - Mobility Coatings achieved record net sales of $460 million, a 4% increase from the prior year, driven by positive price-mix and favorable foreign currency translation [9][10]. - Adjusted EBITDA for Mobility Coatings was $83 million, up 20% compared to the prior-year period, with an Adjusted EBITDA margin improvement of 230 basis points to 18.0% [11]. Cash Flow and Capital Allocation - Cash provided by operating activities was $137 million in Q3 2025, down from $194 million in the prior-year period, primarily due to higher working capital [6]. - Free cash flow decreased to $89 million compared to $164 million a year ago, reflecting lower cash from operating activities and higher capital expenditures [6]. - The company executed $100 million in share repurchases during the quarter and plans to accelerate its capital allocation strategy with up to $250 million for share repurchases in Q4 2025 [12]. Outlook - For Q4 2025, Axalta projects net sales growth in the mid-single digits and expects Adjusted EBITDA of approximately $284 million [13]. - The full-year 2025 outlook includes net sales exceeding $5.1 billion and Adjusted EBITDA of approximately $1.14 billion [13].