ATI Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 29 October 2026: press release. Guidance figures: 2 raised, 2 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Sales grew 26% year-over-year: Sales were $1.42 billion, up 26% year-over-year, with growth in all key markets; GAAP diluted EPS rose 76% to $1.37. Source
• Adjusted EBITDA margin reached 23.0%: Adjusted EBITDA was $327.9 million, or 23.0% of sales, against 20.0% a year earlier; adjusted EPS was $1.46 compared with $0.85. Source
• HPMC margin fell on ramp costs: HPMC segment EBITDA margin was 23.2%, down from 24.1% in the second quarter and 24.2% a year earlier, on higher manufacturing and period costs; segment EBITDA was $167.3 million. Source
• AA&S margin rose on pricing and mix: AA&S segment EBITDA margin was 25.8%, up from 23.7% in the second quarter and 17.3% a year earlier; the second quarter margin included a $9.9 million gain on a facility sale. Source
• Demand backed by long-term agreements: Management said aerospace and defense demand and pricing rose in AA&S, for both commercial jet engine and airframe products, with sales up 17% sequentially. Source
• Share repurchases of $70 million: The company repurchased $70.0 million of common stock at an average $199.62 per share, retiring about 0.4 million shares; $425 million of repurchase authorization remained at quarter end. Source

“We are raising our full-year outlook for adjusted EBITDA by $35 million. This follows the $125 million increase in our outlook just last quarter,”

Kimberly A. Fields, Board Chair, President and CEO

Guidance

What changed from last quarter

• Guidance raised: Full-year 2026 adjusted EBITDA guidance raised by $35 million, following a $125 million raise in the second quarter. Source
• Guidance raised: Full-year 2026 adjusted EPS guidance raised to $5.17 to $5.23 from $4.90 to $5.18. Source
• New guidance: Fourth-quarter 2026 guidance provided for adjusted EBITDA and adjusted EPS, which the prior release did not include. Source
• Guidance kept: Full-year 2026 adjusted free cash flow guidance left at $550 million to $600 million. Source

Results and growth drivers

• Sales grew 26% year-over-year: Sales were $1.42 billion, up 26% year-over-year, with growth in all key markets; GAAP diluted EPS rose 76% to $1.37. Source
• Adjusted EBITDA margin reached 23.0%: Adjusted EBITDA was $327.9 million, or 23.0% of sales, against 20.0% a year earlier; adjusted EPS was $1.46 compared with $0.85. Source
• Year-to-date diluted EPS rose: Year-to-date diluted EPS was $3.31 against $2.16 a year earlier; year-to-date sales were $3,836.3 million versus $3,410.3 million. Source
• Net income up 26% sequentially: Net income attributable to ATI was $189.8 million, up 26% from $151.0 million in the second quarter and 73% from $110.0 million a year earlier. Source

Segments and regions

• HPMC sales up 20% year-over-year: HPMC sales were $721.4 million, up 13% from the second quarter and 20% year-over-year, driven by commercial jet engine pricing and demand; aerospace and defense was 94% of HPMC sales. Source
• HPMC margin fell on ramp costs: HPMC segment EBITDA margin was 23.2%, down from 24.1% in the second quarter and 24.2% a year earlier, on higher manufacturing and period costs; segment EBITDA was $167.3 million. Source
• AA&S sales up 34% year-over-year: AA&S sales were $702.3 million, up 13% from the second quarter and 34% year-over-year, led by aerospace and defense, specialty energy and conventional energy markets. Source
• AA&S margin rose on pricing and mix: AA&S segment EBITDA margin was 25.8%, up from 23.7% in the second quarter and 17.3% a year earlier; the second quarter margin included a $9.9 million gain on a facility sale. Source

“Our results reflect three main drivers: strong demand backed by long-term agreements, differentiated capabilities that make us the partner of choice, and disciplined execution across our operations.”

Kimberly A. Fields, Board Chair, President and CEO

Products and customers

• Commercial jet engine sales rose: Jet Engines - Commercial sales were $603.2 million, 42% of total sales, against $508.3 million in the second quarter and $433.6 million a year earlier. Source
• Aerospace and defense 69% of sales: Total aerospace and defense sales were $994.5 million, 69% of total sales, up from $862.0 million in the second quarter and $792.7 million a year earlier. Source
• Specialty energy sales rose: Specialty energy sales were $80.4 million, up from $59.2 million in the second quarter and $53.9 million a year earlier. Source
• Conventional energy fell sequentially: Conventional energy sales were $82.3 million, down from $103.5 million in the second quarter and up from $56.8 million a year earlier; the release does not explain the sequential change. Source

Costs, margins and pricing

• Gross profit rose to $380.2M: Gross profit was $380.2 million, compared with $309.8 million in the second quarter and $255.3 million a year earlier, while cost of sales rose to $1,043.5 million. Source
• Operating income rose to $271.9M: Operating income was $271.9 million compared with $220.0 million in the second quarter and $162.4 million a year earlier. Source
• Corporate costs rose on fees and insurance: Corporate expenses were $18.8 million, up from $14.9 million in the second quarter, which had an insurance claim benefit, and from $15.6 million a year earlier. Source
• Special items excluded from adjusted results: Special items totaled $15.6 million pre-tax, including $14.4 million of restructuring and other charges; the after-tax impact was $0.09 per share. Source
• Effective tax rate 21.0%: Income tax provision was $51.5 million, an effective rate of 21.0%, against 20.0% in the second quarter and 21.4% a year earlier. Source

“These results show the strength and balance of ATI’s portfolio and reinforce our growth outlook,”

Kimberly A. Fields, Board Chair, President and CEO

Demand and customer drivers

• Demand backed by long-term agreements: Management said aerospace and defense demand and pricing rose in AA&S, for both commercial jet engine and airframe products, with sales up 17% sequentially. Source
• Commercial jet engine sales almost doubled: In AA&S, commercial jet engine sales almost doubled year-over-year, which management attributed to both higher demand and pricing. Source
• Defense sales higher year-over-year: Defense sales were $171.9 million, up from $162.0 million in the second quarter and $161.4 million a year earlier, or 12% of total sales. Source

Cash, capital and shareholder returns

• Operating cash flow of $154.6M: Cash from operations was $154.6 million in the quarter, while capital expenditures were $92.8 million, leaving adjusted free cash flow of $79.6 million. Source
• Year-to-date adjusted free cash flow up: Year-to-date adjusted free cash flow was $222.8 million against $149.5 million a year earlier. Source
• Share repurchases of $70 million: The company repurchased $70.0 million of common stock at an average $199.62 per share, retiring about 0.4 million shares; $425 million of repurchase authorization remained at quarter end. Source
• Senior notes redeemed early: The company redeemed $350 million of 5.875% Senior Notes due 2027 and wrote off $1.2 million of unamortized debt issuance costs as a debt extinguishment charge. Source
• Working capital ratio fell: Managed working capital was 32.9% of annualized sales, down 140 basis points from the second quarter; inventories were $1,657.2 million at quarter end. Source

Strategy, investment and restructuring

• Transformation costs rose to $8.4M: Transformation-related costs were $8.4 million in the third quarter, up from $7.0 million in the second quarter, within restructuring and other charges. Source
• Start-up costs fell from second quarter: Start-up and transaction-related costs were $2.2 million, down from $10.1 million in the second quarter, while restructuring-related costs for severance and facilities were $0.9 million. Source
• Closed operations expense steady: Closed operations and other expense was $1.9 million, compared with $1.8 million in the second quarter and income of $4.5 million a year earlier. Source

Figures management reported

Risks management discussed

• Operational: Ramping commercial production of a new nickel-based superalloy added manufacturing and period costs to HPMC during the quarter. Source
• Financial: The company recorded losses on sales of customer accounts receivable within restructuring and other charges in the quarter. Source

Earlier plans management reported on

• Ahead: Management said third-quarter adjusted EBITDA exceeded the high end of the guidance range by $13 million. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.