ATI Inc.
ATI · NYSE
Next quarter
Expected to report Feb 2, 2027 — estimated from last year’s reporting date.
Consensus is $1.56 EPS for Dec 2026 across 2 estimates, ranging $1.52 to $1.60.
ATI Sep 2026
- 7.35%
- $1.36
- $1.46
- —
- $1.42B
Reported results
- $1.42B
- 26.71%
- $271.90M
- 19.10%
- $189.80M
- $1.37
Highlights
- Earnings and guidance: Adjusted EPS of $1.46 beat the $1.36 consensus by 7.35%; adjusted EBITDA was $327.9 million, $13 million above the high end of guidance, and ATI raised its full-year EBITDA outlook by $35 million.
- Revenue and profit growth: Sales rose 26% year over year to $1.424 billion and 13% sequentially; GAAP net income attributable to ATI increased 73% year over year to $189.8 million, with diluted EPS of $1.37 versus $0.78.
- Margin expansion: Adjusted EBITDA margin reached 23.0%, up 300 basis points year over year; adjusted EBITDA grew 46% to $327.9 million.
- Aerospace demand: Commercial jet-engine revenue rose 39% year over year and 19% sequentially; aerospace and defense supplied $994.5 million, or 69%, of sales, while backlog reached $4.3 billion, up 20% year over year.
- AA&S strength: Advanced Alloys & Solutions sales grew 34% year over year to $702.3 million and segment EBITDA margin reached a record 25.8%, up 850 basis points year over year.
- HPMC ramp costs: High Performance Materials & Components sales rose 20% to $721.4 million, but margin eased to 23.2% from 24.2% a year ago as a new nickel superalloy ramp weighed on results by about 200 basis points versus plan.
- Updated outlook: Full-year adjusted EBITDA guidance is now $1.190 billion-$1.200 billion and adjusted EPS $5.17-$5.23; fourth-quarter EBITDA guidance is $345-$355 million, with adjusted free cash flow guidance unchanged at $550-$600 million.
- Cash and repurchases: Third-quarter adjusted free cash flow was $79.6 million; ATI repurchased $70 million of stock at an average $199.62 per share, with $425 million of authorization remaining.
Analysis
ATI’s third quarter was a broad-based growth and margin-expansion print, with results exceeding management’s expectations and lifting the full-year outlook again. Adjusted EPS of $1.46 topped the $1.36 consensus by 7.35%. Sales of $1.424 billion increased 26% from a year ago and 13% from Q2; adjusted EBITDA of $327.9 million rose 46% year over year and 15% sequentially, exceeding the high end of guidance by $13 million. GAAP diluted EPS was $1.37, versus $0.78 a year ago and $1.09 last quarter; net income attributable to ATI was $189.8 million, up 73% year over year and 26% sequentially.
The main drivers were strong jet-engine demand and a step-up in AA&S profitability. Jet-engine revenue grew 39% year over year, while AA&S posted a record 25.8% segment EBITDA margin on improved pricing, volume and mix. HPMC also grew, but its margin was held back by the production ramp of a new superalloy; management expects that drag to largely fade by year-end. Backlog near $4.3 billion and sustained customer demand underpin the raised outlook: full-year adjusted EBITDA is now $1.190-$1.200 billion, following a $125 million increase last quarter and a further $35 million raise this quarter. Fourth-quarter EBITDA is expected at $345-$355 million.
Earnings and higher guidance
- Quarterly result: Adjusted EBITDA was $327.9 million, up 46% year over year from $225.1 million and 15% sequentially from $284.4 million. Its 23.0% sales margin expanded 300 basis points year over year from 20.0%.
- GAAP performance: Operating income increased to $271.9 million from $162.4 million a year ago and $220.0 million in Q2. Net income attributable to ATI was $189.8 million, compared with $110.0 million a year ago and $151.0 million last quarter.
- Full-year outlook: The adjusted EBITDA range rose to $1.190-$1.200 billion from $1.135-$1.185 billion, a $35 million increase at the midpoint. Adjusted EPS guidance is $5.17-$5.23, versus the prior $4.90-$5.18 range; management expects 39% full-year EBITDA growth.
- Fourth quarter: ATI expects adjusted EBITDA of $345-$355 million and adjusted EPS of $1.51-$1.57, with sequential profit improvement in both segments. Full-year adjusted free cash flow guidance remains $550-$600 million.
Jet-engine demand and backlog
Aerospace and defense generated $994.5 million, or 69%, of sales, up 25% year over year. Commercial jet-engine sales climbed 39% to $603.2 million, while commercial airframe sales increased 11% to $219.4 million and defense sales grew 6% to $171.9 million. Specialty energy added momentum, rising 49% year over year to $80.4 million, led by commercial nuclear and industrial gas turbine demand. Management raised its expected full-year jet-engine revenue growth to the low-to-mid-20% range from the prior high-teens view, and said it sees no sign of customer destocking. Confirmed backlog was $4.3 billion, up from $3.6 billion a year ago; about 75% was scheduled for delivery within 12 months.
AA&S margin transformation
- Record profitability: AA&S sales increased 34% year over year to $702.3 million, while segment EBITDA rose to $181.3 million from $90.4 million. Margin reached a record 25.8%, versus 17.3% a year ago and 23.7% in Q2.
- What drove the step-up: Higher pricing and volumes and a richer mix supported the result. Aerospace and defense accounted for 45% of AA&S sales; commercial jet-engine sales almost doubled year over year, and specialty energy demand also strengthened.
- Durability: Management attributed the improvement to the segment’s shift away from commodity stainless products toward higher-value aerospace, defense and specialty energy, alongside stronger long-term contracts and pricing. It expects AA&S margins in the mid-20% range in Q4 and described the improved earnings profile as sustainable.
HPMC alloy ramp
HPMC sales grew 20% year over year to $721.4 million, led by commercial jet-engine products, but segment EBITDA margin declined to 23.2% from 24.2% a year ago and 24.1% in Q2. The main pressure was the ramp of a new nickel-based superalloy into commercial production, which reduced margin by about 200 basis points versus plan; management estimated the shortfall represented roughly $15-$20 million of EBITDA. ATI moved the alloy from qualification to production in nine months and is one of only two worldwide producers. The near-term manufacturing inefficiencies are expected to ease in Q4 and be behind the business by year-end; management expects HPMC margins to reach the mid-20% range in Q4.
Cash, investment and buybacks
- Cash generation: Third-quarter operating cash flow was $154.6 million and capital expenditures were $92.8 million. Adjusted free cash flow was $79.6 million, bringing year-to-date adjusted free cash flow to $222.8 million, 49% above the year-ago period.
- Working capital: Managed working capital was 32.9% of annualized sales, an improvement of 140 basis points sequentially but 40 basis points above year-end 2025. Inventory was $1.657 billion, up from $1.403 billion at year-end; management said elevated inventory supports new capacity and expects it to normalize over time.
- Capital returns and liquidity: ATI repurchased $70 million of shares during the quarter at an average $199.62 per share, leaving $425 million of authorization. Cash was $442.3 million at quarter-end, and the company reported approximately $570 million of additional ABL availability.
