Core Insights - ATI reported $1.13 billion in revenue for Q3 2025, a year-over-year increase of 7.1% and an EPS of $0.85 compared to $0.60 a year ago, indicating strong financial performance despite a slight revenue miss against estimates [1] - The revenue fell short of the Zacks Consensus Estimate by 1.25%, while the EPS exceeded the consensus estimate by 13.33% [1] Financial Performance Metrics - High Performance Materials & Components sales were $602.9 million, a 9.1% increase year-over-year, but below the average estimate of $622.69 million [4] - Advanced Alloys & Solutions sales reached $522.6 million, a 4.8% year-over-year increase, surpassing the average estimate of $507.44 million [4] - EBITDA for Advanced Alloys & Solutions was $90.4 million, exceeding the average estimate of $81.61 million, while EBITDA for High Performance Materials & Components was $145.8 million, slightly below the estimate of $150.04 million [4] Stock Performance - ATI shares have returned +15.7% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance in the near term [3]

Company Performance - ATI reported quarterly earnings of $0.85 per share, exceeding the Zacks Consensus Estimate of $0.75 per share, and up from $0.60 per share a year ago, representing an earnings surprise of +13.33% [1] - The company posted revenues of $1.13 billion for the quarter ended September 2025, which missed the Zacks Consensus Estimate by 1.25%, compared to year-ago revenues of $1.05 billion [2] - Over the last four quarters, ATI has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance - ATI shares have increased approximately 66.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 16.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.84 on revenues of $1.21 billion, and for the current fiscal year, it is $3.06 on revenues of $4.63 billion [7] Industry Outlook - The Aerospace - Defense Equipment industry, to which ATI belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact ATI's stock performance [5]

Financial Data and Key Metrics Changes - Revenue increased by 7% year over year, exceeding $1.1 billion [3][4] - Adjusted EPS was $0.85, surpassing the high end of the projected range by $0.10 [3] - Adjusted EBITDA totaled $225 million, with $215 million excluding oil and gas rights, marking a 19% year-over-year improvement [14][3] - Adjusted EBITDA margin exceeded 20%, the highest since the pandemic [3][4] - Cash generated from operations year to date reached $299 million, a $273 million improvement from last year [4][14] Business Line Data and Key Metrics Changes - High Performance Materials & Components (HPMC) segment margins were above 24%, while Advanced Alloys & Solutions (AANS) segment margins were above 17% [4][15] - Aerospace and Defense (A&D) revenue rose 21% year over year, accounting for 70% of total revenue [5][6] - Jet engine revenue, which constitutes 39% of total revenue, grew 19% year over year [6][8] - Airframe sales increased by 9% year over year, supported by Boeing and Airbus production ramps [7][8] - Defense revenue surged 51% year over year, reflecting broad-based strength across various defense programs [9][10] Market Data and Key Metrics Changes - Jet engine growth is expected to exceed 20% for the full year, with Q4 growth anticipated in the high single to low double digits [6][8] - Airframe revenues are expected to finish modestly above 2024 levels, with high single-digit growth anticipated next year [8] - Defense markets are projected to continue record performance due to modernization and replenishment programs [10][12] Company Strategy and Development Direction - The company is focused on high-value materials and markets, with 70% of revenue now coming from aerospace and defense [12][20] - Strategic pricing and mix optimization are key levers for growth, with long-term agreements supporting future investments [20][21] - Operational excellence and productivity improvements are driving margin expansion and cash generation [21][22] - The company is committed to disciplined capital deployment, prioritizing high-return investments [13][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong demand in core markets, particularly aerospace and defense [5][20] - The outlook for Q4 and 2026 remains positive, with expectations of sustained growth in A&D [27][60] - The company is well-positioned to capitalize on long-term growth opportunities, supported by strong customer relationships and proprietary materials [12][20] Other Important Information - The company plans to continue monetizing non-core assets while maintaining disciplined capital investments [15][18] - The CFO, Don Newman, is set to retire after Q4, with a search for his successor underway [19] Q&A Session Summary Question: What has changed since Q2 to drive the revised outlook and guidance increase? - Management noted stronger than expected A&D performance, particularly in defense, contributing to the guidance increase [26][27] Question: What is being done to manage melt capacity for nickel alloys? - The company is focusing on productivity, reliability, and selective expansion of melt capacity to meet growing demand [29][30] Question: What does being the number one source of flat rolled titanium products to Airbus mean for the P&L? - This status translates to increased revenue and higher margins from premium titanium products, with a significant revenue increase expected next year [34][35] Question: What is the expected growth in airframe sales for 2026? - Airframe sales are anticipated to grow at a high single-digit rate, with continued strength in jet engine demand expected [60] Question: How is the company managing working capital improvements? - Improvements in accounts receivable management and inventory efficiencies have contributed to better working capital performance [52][53]

Financial Data and Key Metrics Changes - Revenue increased by 7% year-over-year, exceeding $1.1 billion [3][4] - Adjusted EPS was $0.85, $0.10 above the high end of the projected range [3] - Adjusted EBITDA totaled $225 million, with $215 million excluding approximately $10 million related to the sale of oil and gas rights, representing a 19% year-over-year improvement [3][14] - Adjusted EBITDA margin exceeded 20%, the highest since the pandemic and almost double the margin from 2019 [3][4] - Cash generated from operations year-to-date reached $299 million, a $273 million improvement from last year [4][14] Business Line Data and Key Metrics Changes - High Performance Materials & Components (HPMC) segment margins were above 24% [4][15] - Advanced Alloys & Solutions (AANS) segment margins improved to 17.3% [15] - Aerospace and Defense (A&D) revenue rose 21% year-over-year, accounting for 70% of total revenue [5][6] - Jet engine revenue, which is 39% of total revenue, grew 19% year-over-year [6][8] - Airframe sales grew 9% year-over-year, supported by increased production rates from Boeing and Airbus [7][8] Market Data and Key Metrics Changes - Defense revenue increased 51% year-over-year, reflecting broad-based strength across various defense programs [9][10] - The order book extends into mid-2027, indicating strong demand and supply constraints [7][10] - The company expects Q4 jet engine revenue growth in the high single to low double digits [7] Company Strategy and Development Direction - The company is focused on high-value materials and markets, with 70% of revenue now coming from aerospace and defense [12][20] - Investments in nickel and titanium capacities are aimed at expanding differentiated products without negatively impacting pricing [13][20] - The strategy emphasizes operational excellence, productivity improvements, and long-term customer partnerships [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong demand in core markets, particularly in aerospace and defense [5][20] - The company anticipates robust cash generation and margin expansion through disciplined execution and operational improvements [10][18] - Future growth is expected to be supported by long-term agreements and differentiated materials [12][20] Other Important Information - The company plans to raise full-year guidance for adjusted EBITDA and free cash flow based on strong Q3 performance [4][16] - The CFO, Don Newman, is set to retire after the fourth quarter, with a search for his successor underway [19] Q&A Session Summary Question: What changed since Q2 to drive the revised outlook and guidance increase? - Management noted stronger than expected A&D performance, particularly in defense, and operational productivity improvements [26][27] Question: What is being done to manage melt capacity for nickel alloys? - The company is focusing on productivity, reliability, and selective expansion of melt capacity to meet growing demand [29][30] Question: What does being the number one source of flat rolled titanium products to Airbus mean for the P&L? - This status translates to increased revenue and higher margins from premium titanium products, with a significant revenue increase expected next year [34][35] Question: What is the expected growth in airframe sales for 2026? - Management anticipates high single-digit growth in airframe revenues driven by steady production ramps and increased ATI content [59] Question: How is working capital improvement contributing to free cash flow? - Improvement in accounts receivable management and inventory efficiencies contributed to working capital improvements [52][53]

Financial Data and Key Metrics Changes - Revenue increased by 7% year over year, exceeding $1.1 billion [3][4] - Adjusted EPS was $0.85, $0.10 above the high end of the projected range [3] - Adjusted EBITDA totaled $225 million, with $215 million excluding oil and gas rights, exceeding guidance by $5 million [4][14] - Adjusted EBITDA margin exceeded 20%, the highest since the pandemic [3][4] - Cash generated from operations year to date reached $299 million, a $273 million improvement from last year [4][15] Business Line Data and Key Metrics Changes - High Performance Materials & Components (HPMC) segment margins were above 24% [4][15] - Advanced Alloys & Solutions (AANS) segment margins improved to 17.3% [15] - Aerospace and Defense (A&D) revenue rose 21% year over year, now accounting for 70% of total revenue [5][11] - Jet engine revenue grew 19% year over year, representing 39% of total revenue [5][6] - Airframe sales grew 9% year over year, supported by Boeing and Airbus production ramps [6][7] - Defense revenue increased 51% year over year, reflecting broad-based strength across various programs [8][9] Market Data and Key Metrics Changes - Jet engine MRO represented about 50% of total engine sales, indicating strong aftermarket demand [5][39] - Boeing's production rate increased to 42 per month for the 737, and Airbus targets 75 per month by 2027 [7] - Defense markets are expected to continue strong growth, with three consecutive years of double-digit growth [9][11] Company Strategy and Development Direction - Company strategy focuses on differentiated, high-value materials, with 70% of revenue from aerospace and defense [11][20] - Investments in nickel and titanium capacity are aimed at expanding competitive advantages without negatively impacting pricing [12][20] - Operational excellence and disciplined execution are emphasized to drive productivity and margin expansion [9][21] Management's Comments on Operating Environment and Future Outlook - Management expects strong demand in core markets, particularly in aerospace and defense, to continue through 2026 [5][28] - The company is well-positioned for continued share gains and profitable growth through the aerospace cycle [6][11] - Management highlighted the importance of long-term agreements and customer partnerships in supporting growth [11][20] Other Important Information - The company plans to raise full-year guidance for adjusted EBITDA to between $848 million and $858 million [4][16] - Cash generated from sales of non-core assets totaled approximately $30 million year to date [17] - The CFO is set to retire after the fourth quarter, with a search for a successor underway [19] Q&A Session Summary Question: What changed since Q2 to drive the revised outlook and guidance increase? - Management noted stronger than expected A&D performance, particularly in defense, contributing to the guidance increase [26][27] Question: What are you doing to manage melt capacity? - The company is focusing on productivity, reliability, and higher melt yields to meet record demand for premium nickel alloys [29][30] Question: What is the status of the zirconium supply chain? - The supply chain for zirconium products remains stable, with stockpiles built to manage potential disruptions [63][65] Question: How do you anticipate growth in the specialty energy market? - Growth is expected to accelerate in the specialty energy market, particularly in gas turbine and nuclear applications [82][84]

Financial Performance - Q3 2025 sales reached $1.1 billion, a 7% year-over-year increase[7] - Adjusted EBITDA for Q3 2025 was $225 million, up 21% year-over-year, including ~$10 million gains from oil & gas rights sale[7] - Adjusted EBITDA margin for Q3 2025 was 20%, a 230 bps increase year-over-year[7] - Adjusted EPS for Q3 2025 was $0.85, a 42% year-over-year increase[7] Segment Performance - Aerospace & Defense (A&D) accounted for 70% of total sales, with $793 million in Q3[3, 13] - HPMC (High Performance Materials & Components) sales were $603 million, up 9% year-over-year, with an adjusted EBITDA margin of 24%, a 190 bps increase[15] - AA&S (Advanced Alloys & Solutions) sales were $523 million, up 5% year-over-year, with an adjusted EBITDA margin of 17%, a 250 bps increase[20] Growth Drivers - Significant defense growth with a 51% year-over-year increase in Q3[13] - Strong jet engine growth with a 19% year-over-year increase[13] - Airframe growth driven by share gains, up 9% year-over-year[13] Capital Allocation - $150 million in share repurchases were made in Q3, with ~$1 billion repurchased since 2022 at an average price of ~$51 per share[9] - Liquidity of ~$1 billion, including $372 million of cash on hand[34] Outlook - Full-year Adjusted EBITDA guidance raised to $848 - $858 million[9, 35] - Full-year Adjusted EPS guidance raised to $3.15 - $3.21[9, 35]

Financial Performance - Third quarter 2025 sales reached $1.13 billion, a 7% increase year-over-year, driven by a 21% increase in aerospace & defense sales[6] - Net income attributable to ATI was $110 million, up 33% year-over-year, with earnings per share of $0.78 compared to $0.57 in Q3 2024[6] - Adjusted EBITDA for Q3 2025 was $225 million, representing a 21% increase year-over-year and 20.0% of sales[6] - Total sales for the fiscal quarter ended September 28, 2025, were $1,125.5 million, a 7.0% increase from $1,051.2 million in the same quarter of 2024[23] - Gross profit for the quarter was $255.3 million, up 13.6% from $224.8 million year-over-year[23] - Operating income increased to $162.4 million, compared to $142.2 million in the same quarter of the previous year, reflecting a growth of 14.4%[23] - Net income attributable to ATI for the quarter was $110.0 million, a 33.0% increase from $82.7 million in the prior year[23] - Adjusted net income attributable to ATI was $119.4 million, with an adjusted EPS of $0.85, up from $0.60 in the same quarter of 2024[33] - Adjusted EBITDA for the quarter was $225.1 million, an increase from $185.7 million in the same quarter of 2024[34] Segment Performance - Aerospace & defense sales accounted for 70% of total Q3 2025 sales, with record sales of $793 million in this segment[2] - High Performance Materials & Components (HPMC) segment sales were $602.9 million, with an EBITDA margin of 24.2%[13] - Advanced Alloys & Solutions (AA&S) segment sales were $522.6 million, with an EBITDA margin of 17.3%[15] - Segment EBITDA for High Performance Materials & Components was $145.8 million, representing 24.2% of sales, while Advanced Alloys & Solutions had an EBITDA of $90.4 million, or 17.3% of sales[24] - Aerospace & Defense segment generated $792.7 million, accounting for 70% of total revenue, up from 62% in the same quarter of 2024[28] Cash Flow and Capital Management - Operating cash flow for year-to-date 2025 was $299 million, reflecting an improvement of $273 million compared to the previous year[11] - The company reported a cash provided by operating activities of $230 million for Q3 2025[19] - Cash provided by operating activities for Q3 2025 was $229.5 million, a significant increase from $24.0 million in Q3 2024[39] - Adjusted Free Cash Flow for Q3 2025 was $199.7 million, compared to a negative $37.1 million in Q3 2024[39] - Cash used in operating activities was $298.5 million, significantly higher than $26.3 million in the same period last year[27] - Cash used in investing activities for Q3 2025 was $(29.8) million, compared to $(61.1) million in Q3 2024[39] Shareholder Returns - The company repurchased $150 million of its stock in Q3 2025, bringing total share repurchases for the year to $470 million[11] - The company raised its full-year guidance for adjusted earnings per share to a range of $3.15 to $3.21, up from the previous range of $2.90 to $3.07[4] Balance Sheet and Financial Stability - Total current assets decreased to $2,659.8 million from $2,945.0 million at the end of December 2024, primarily due to a reduction in cash and cash equivalents[26] - Total liabilities decreased to $3,176.9 million from $3,275.4 million, indicating improved financial stability[26] - The company reported a decrease in cash and cash equivalents to $372.2 million from $721.2 million at the beginning of the period[27] - The allowance for doubtful accounts was $4.7 million in Q3 2025, up from $3.4 million in Q2 2025[42] - Inventory for Q3 2025 was $1,405.6 million, slightly down from $1,412.6 million in Q2 2025[42] Market Contribution - The company reported a total of $2,720.7 million in core end markets revenue year-to-date, representing an 80% share of total revenue[28] - The Automotive market contributed $61.3 million, maintaining a 6% share of total revenue for the quarter[28] Other Financial Metrics - Managed working capital as a percentage of annualized sales was 36.4% for Q3 2025, slightly down from 36.5% in Q2 2025, but up from 30.9% in Q3 2024[42] - Total managed working capital for Q3 2025 was $1,639.3 million, compared to $1,666.6 million in Q2 2025 and $1,451.3 million in Q3 2024[42] - Annualized prior three months sales for Q3 2025 were $4,502.2 million, down from $4,561.4 million in Q2 2025[42] - The company did not make cash contributions to the U.S. qualified defined benefit pension plan in Q3 2025 or Q3 2024[39] - Restructuring and other charges for the quarter amounted to $12.9 million, impacting net income[34] - The company’s weighted average shares outstanding for the quarter were 137.0 million, compared to 128.7 million in the same quarter of 2024[29] - ATI's basic net income per common share for the quarter was $0.80, compared to $0.64 in the same quarter of the previous year, marking a 25.0% increase[23]

Core Insights - The company reported third quarter 2025 sales of $1.13 billion, a 7% increase year-over-year, driven by a 21% increase in aerospace and defense sales [3][7] - Net income attributable to the company was $110 million, up 33% from the previous year, with earnings per share of $0.78 compared to $0.57 in Q3 2024 [3][7] - The company raised its full-year guidance for adjusted earnings and cash flow due to strong performance and positive demand signals in core markets [4][5] Financial Performance - Third quarter 2025 adjusted EBITDA was $225 million, an increase of 21% year-over-year, representing 20% of sales [3][7] - Adjusted net income attributable to the company was $119 million, up 39% year-over-year, with adjusted earnings per share of $0.85 compared to $0.60 in Q3 2024 [3][7] - Year-to-date operating cash flow reached $299 million, reflecting an improvement of $273 million compared to the previous year [5] Segment Performance - High Performance Materials & Components (HPMC) segment sales were $602.9 million, with segment EBITDA of $145.8 million, or 24.2% of sales [6][14] - Advanced Alloys & Solutions (AA&S) segment sales were $522.6 million, with segment EBITDA of $90.4 million, or 17.3% of sales [9][14] - Aerospace and defense sales represented 70% of total sales, with strong demand for commercial jet engine and defense products [3][19] Guidance and Future Outlook - The company provided updated guidance for Q4 2025, with adjusted EBITDA expected to be between $221 million and $231 million, and adjusted earnings per share projected to be between $0.84 and $0.90 [2] - Full-year 2025 adjusted earnings guidance was raised to a range of $3.15 to $3.21 per share, up from the previous range of $2.90 to $3.07 [2] - The company continues to focus on maximizing free cash flow and driving efficiencies in working capital [5]

Company Performance - ATI closed at $82.16, reflecting a -2.56% change from the previous day, underperforming the S&P 500's loss of 0.53% [1] - Over the last month, ATI's shares increased by 7.98%, outperforming the Aerospace sector's gain of 2.66% and the S&P 500's gain of 1.13% [1] Upcoming Earnings - ATI is set to release its earnings report on October 28, 2025, with an anticipated EPS of $0.75, representing a 25% increase year-over-year [2] - The consensus estimate for revenue is $1.14 billion, indicating an 8.43% increase compared to the same quarter last year [2] Annual Forecast - Zacks Consensus Estimates project earnings of $3.06 per share and revenue of $4.63 billion for the year, reflecting increases of +24.39% and +6.12% respectively compared to the previous year [3] Analyst Estimates - Recent changes in analyst estimates for ATI suggest a favorable outlook on the company's business health and profitability [3] - The Zacks Rank system currently rates ATI at 4 (Sell), with the consensus EPS estimate remaining steady over the past month [5] Valuation Metrics - ATI has a Forward P/E ratio of 27.6, which is a discount compared to the industry average Forward P/E of 34.54 [5] - The company has a PEG ratio of 1.26, while the average PEG ratio for Aerospace - Defense Equipment stocks is 2.5 [6] Industry Context - The Aerospace - Defense Equipment industry, part of the Aerospace sector, holds a Zacks Industry Rank of 96, placing it in the top 39% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for ATI, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - ATI is expected to report quarterly earnings of $0.75 per share, reflecting a +25% change year-over-year [3] - Revenues are projected to be $1.14 billion, an increase of 8.4% from the previous year [3] Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from analysts [4] - A negative Earnings ESP of -1.21% suggests recent bearish sentiment among analysts regarding ATI's earnings prospects [12] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, with positive readings being more reliable [9][10] - ATI's current Zacks Rank is 4, which complicates the prediction of an earnings beat [12] Historical Performance - In the last reported quarter, ATI exceeded expectations with earnings of $0.74 per share against an estimate of $0.72, resulting in a +2.78% surprise [13] - Over the past four quarters, ATI has beaten consensus EPS estimates three times [14] Conclusion - Despite the potential for an earnings beat, ATI does not appear to be a compelling candidate for a positive surprise based on current estimates and rankings [17]