ATI Inc.

Second-quarter revenue was $1.3 billion, up 11% year over year. Adjusted EBITDA was $284 million, up 37% year over year and $29 million above the high end of guidance; excluding a $10 million asset sale gain, underlying performance still beat the high end by nearly $20 million. Adjusted EBITDA margin was 22.6%, up 440 basis points year over year. Adjusted EPS was not stated for Q2 in the prepared remarks, but management said EPS also exceeded the high end of guidance. First-half adjusted free cash flow was $143 million versus a use of $50 million in the first half of 2025. For the third quarter, ATI guided to adjusted EBITDA of $305 million to $315 million and adjusted EPS of $1.31 to $1.37. Full-year guidance was raised to adjusted EBITDA of $1.135 billion to $1.185 billion and adjusted EPS of $4.90 to $5.18, with adjusted free cash flow of $550 million to $600 million. Management said full-year consolidated adjusted EBITDA margins are expected in the low 20% range, and incremental margins are now expected at 50%.

Kimberly Fields said ATI is seeing a structural step-up in earnings power, not just a temporary market benefit, with stronger commercial terms, better mix, and operational improvements from Elevation. She emphasized that AA&S has been transformed into a second durable earnings engine, while HPMC remains the core aerospace growth platform with sequential improvement expected in the second half. Her tone was confident and strategic, stressing differentiated capacity, long-term customer agreements, and visible growth into 2027 and beyond.

Rob Foster highlighted that second-quarter adjusted EBITDA of $284 million beat guidance by $29 million, and first-half free cash flow improved to $143 million versus a $50 million use last year. He said managed working capital was 34% of sales at quarter-end, capex was $69 million including $23 million funded by customers, and gross capex guidance remains $280 million to $300 million with customer-funded capex of $55 million to $65 million. He also noted ATI bought back $50 million of stock in Q2 and still has $495 million remaining under its authorization.

Analysts focused on why EBITDA guidance rose more than free cash flow guidance, and management said some of the higher second-half earnings will sit in receivables from late Q4 shipments, while inventory will also be built for early 2027. On AA&S margin potential, management said the segment can reach the mid-20% range going forward, supported by portfolio upgrades, improved pricing and mix, and rising A&D exposure. Questions also probed HPMC second-half margin improvement, airframe growth, and whether the Q4 EBITDA exit rate can carry into 2027; management said the second-half uplift is backed by contract renewals, timing shifts from qualifications, and committed orders, and that the Q4 exit rate is directionally sensible even though 2027 guidance was not provided.