Axalta Coating Systems reported third-quarter 2025 results for the period ended Sept. 30. Net sales were $1.29 billion, down 2% year over year. Net income rose to $110 million for a net income margin of 8.5%, up 80 basis points. Diluted EPS increased 11% to $0.51. Adjusted net income was $144 million. Adjusted EBITDA reached a quarterly record of $294 million with margin of 22.8%, up 70 basis points year over year. The company repurchased $100 million of shares in the quarter.

“We executed another strong quarter delivering record Adjusted EBITDA and Adjusted Diluted EPS. Our results reflect our focus on operational excellence while the team has done an exceptional job navigating the challenging macroeconomic environment,” said Chris Villavarayan, chief executive officer and president. “We have now delivered twelve consecutive quarters of Adjusted EBITDA and Adjusted EBITDA margin growth year over year and are well prepared for 2026.”

Consolidated Drivers

Net sales declined on softer Performance Coatings in North America, partly offset by Mobility growth and favorable foreign currency translation. Net income benefited from a 7% reduction in selling, general and administrative expenses and lower interest expense. Adjusted diluted EPS increased 6% to $0.67 on lower interest expense and fewer diluted shares.

Operating cash flow was $137 million versus $194 million a year ago, reflecting higher working capital from planned inventory builds. Free cash flow was $89 million compared to $164 million. Capital expenditures increased to support productivity and growth initiatives.

Segment Results

Performance Coatings: Net sales were $828 million compared to $877 million in the prior-year period. Refinish net sales declined 7% to $517 million, primarily in North America on lower claims activity and order timing. Industrial net sales fell 4% to $311 million, with positive price-mix and favorable foreign currency partly offsetting volume softness. Adjusted EBITDA was $211 million versus $221 million. Adjusted EBITDA margin improved 20 basis points to 25.5% on resilient profitability despite demand pressure.

Mobility Coatings: Net sales were a third-quarter record at $460 million, up 4% year over year on positive price-mix in both end markets and favorable foreign currency, partly offset by volume. Light Vehicle grew 7% on organic gains in Latin America and China and positive mix. Commercial Vehicle decreased $7 million to $96 million on lower Class 8 production, partly offset by new wins, positive mix and favorable foreign currency. Adjusted EBITDA increased 20% to $83 million. Adjusted EBITDA margin improved 230 basis points to 18.0% on mix and cost discipline.

Capital Allocation

The company repurchased 3.3 million shares for $100 million in the quarter. Year to date through Sept. 30, repurchases totaled 5.3 million shares for $165 million. In the fourth quarter Axalta plans to deploy up to $250 million toward repurchases.

Outlook

For the fourth quarter of 2025, Axalta expects net sales down a mid single-digit percentage year over year, adjusted EBITDA of about $284 million and adjusted diluted EPS of about $0.60. For full-year 2025, Axalta expects net sales greater than $5.1 billion, adjusted EBITDA of about $1.14 billion, adjusted diluted EPS of about $2.50, free cash flow of about $450 million, depreciation and amortization of about $295 million, a tax rate as adjusted of about 24%, diluted shares of about 216 million, interest expense of about $180 million and capital expenditures of about $180 million. Axalta does not provide forward reconciliations for non-GAAP estimates.