Axalta Reports $99 Million Net Income in Q1 2025, Revenue Declines 2.5%

Axalta Coating Systems Ltd. reported a net income of $99 million for the first quarter of 2025, a significant increase from $39 million in the same period last year. This translates to a basic and diluted earnings per share of $0.45, compared to $0.18 in the prior year. The company's total revenue for the quarter was $1.262 billion, reflecting a 2.5% decrease from $1.294 billion in the first quarter of 2024. The decline in revenue was attributed to unfavorable foreign currency translation effects and lower sales volumes, partially offset by contributions from the acquisition of The CoverFlexx Group and higher average selling prices.

In terms of operational performance, Axalta's Performance Coatings segment saw a 3.1% decrease in net sales, totaling $822 million, primarily due to lower sales volumes and adverse currency impacts. Conversely, the Mobility Coatings segment experienced a smaller decline of 1.3%, with net sales of $440 million, supported by higher average selling prices and a slight increase in sales volumes. The company’s adjusted EBITDA for the quarter rose to $270 million, up from $259 million in the previous year, driven by improved margins in the Mobility Coatings segment.

Strategically, Axalta completed a $9 million acquisition in its Performance Coatings segment during the quarter, which is expected to enhance its market position. The company is also in the midst of a global transformation initiative aimed at streamlining operations and reducing costs, with an anticipated annual savings of approximately $75 million once fully implemented. The initiative is expected to result in a workforce reduction of over 500 employees and has already incurred pre-tax charges of $6 million in the first quarter.

On the operational front, Axalta reported a decrease in cash flow from operating activities, which amounted to $26 million, down from $34 million in the prior year. This decline was primarily due to increased working capital requirements, including higher inventories and accounts receivable. The company ended the quarter with cash and cash equivalents of $575 million, a decrease from $596 million at the end of 2024. Axalta maintains a strong liquidity position, with $778 million available under its revolving credit facility.

Looking ahead, Axalta anticipates continued challenges from foreign currency fluctuations and market conditions but remains optimistic about the potential benefits from its recent acquisition and ongoing transformation initiatives. The company expects to realize further operational efficiencies and cost savings as it progresses through 2025, positioning itself for improved financial performance in the coming quarters.