Axalta Refines Merger Terms as Quarterly Sales Decline
The coatings manufacturer reported first-quarter net sales of $1.25 billion, a decrease of $8 million year-over-year.
Axalta Coating Systems (AXTA) reported a decline in net sales for the first quarter of 2026. The results arrived alongside updates to the company's pending merger with AkzoNobel.
Net sales fell to $1.25 billion, continuing a downward trend from $1.3 billion in the second quarter of 2025 and $1.262 billion in the fourth quarter of 2025. Adjusted EBITDA for the quarter was $259 million, a decrease of $11 million year-over-year and a drop from the $272 million recorded in the previous quarter.
Profitability margins compressed as the company faced headwinds. Adjusted EBITDA margin fell to 20.6% in the first quarter, down from 21.5% in the fourth quarter of 2025 and 22.8% in the third quarter of 2025.
Performance within the company's business segments diverged. Mobility Coatings net sales rose 3% year-over-year to $452 million, extending a growth trend that included a 1% increase in the second quarter and a 4% increase in the third quarter of 2025. Conversely, Performance Coatings net sales declined to $802 million, down from $836 million in the second quarter and $828 million in the third quarter of 2025.
Cash flow provided a point of strength. Cash provided by operating activities reached a first-quarter record of $68 million, an increase of $42 million year-over-year. This figure followed a record $344 million in the fourth quarter of 2025. Interest expense declined 14% compared to the same period last year.
On July 23, 2026, Axalta and AkzoNobel refined the governance arrangements for their proposed merger. The updated terms shorten the period before the annual re-election of all directors from five years to three.
The companies also lowered the approval threshold for key appointments and dismissals. The requirement was reduced from 75% to two-thirds of Non-Executive Directors.