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]