ATI (ATI) Q4 2025 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Tue, February 3, 2026 astatine 9:03 AM CST 39 min read

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Tuesday, Feb. 3, 2026 astatine 8:30 a.m. ET

• President and Chief Executive Officer — Kimberly Fields

• Executive Vice President, Finance and Chief Financial Officer — Donald Newman

• Executive Vice President, Finance and Chief Financial Officer — Rob Foster

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Kimberly Fields: Before I begin, I'd similar to invited Rob Foster, arsenic ATI's caller Chief Financial Officer. Rob brings heavy operational experience, beardown fiscal discipline, and proven enactment to this relation aft much than a decennary astatine ATI. He has been a trusted fiscal spouse of excavation since 2019, and I'm assured helium volition assistance pb ATI into its adjacent signifier of profitable growth. I besides privation to convey Don Newman for his enactment implicit the past six years. Under Don's tenure, ATI completed a palmy transformation, expanding margins, strengthening currency flow, and sharpening our absorption connected differentiated aerospace and defence markets. Don volition stock highlights from our 2025 show shortly.

Turning to our results, the 4th fourth capped a precise palmy afloat year. We exceeded nett and escaped currency travel expectations, expanded margins, improved operational reliability, and deepened our lawsuit relationships. We are entering 2026 with momentum crossed our halfway markets successful aerospace and defense. Let maine commencement with the cardinal results successful the 4th quarter. Q4 gross was $1.2 billion. Adjusted EBITDA was $232 million, supra the precocious extremity of our guidance range. Adjusted EBITDA borderline was 19.7%, an summation of 180 ground points from Q4 2024, demonstrating continued advancement toward our 2027 borderline goals. For afloat twelvemonth 2025, gross was $4.6 billion, up 5% twelvemonth implicit year, driven by 14% maturation successful aerospace and defense.

Adjusted EBITDA exceeded $859 million, up 18% twelvemonth implicit year. Adjusted EPS was $3.24, up 32% from 2024. Adjusted escaped currency travel totaled $380 million, up 53% from 2024, besides exceeding the precocious extremity of our guidance. We returned $470 cardinal to shareholders this year, representing 124% of escaped currency flow. These results bespeak disciplined execution, beardown pricing, and favorable premix driven by our astir differentiated products. Given our assurance successful lawsuit request and our quality to execute the ramp, we are guiding to $1 cardinal of adjusted EBITDA astatine the midpoint of our guidance scope for 2026, a 16% summation twelvemonth implicit year. There are 3 cardinal reasons we are assured successful this outlook.

First, aerospace and defence request continues to beryllium beardown entering 2026. Commercial aerospace request is accelerating crossed constrictive assemblage and wide assemblage platforms. Next-generation engines proceed to summation share. Airframes and engines trust connected ATI proprietary alloys, forgings, and specialty materials. We're seeing a measurement alteration summation successful bid enactment beyond what we would usually spot successful seasonal archetypal 4th spot crossed some semipermanent agreements and transactional demand. Within A&D, full-year pitchy motor income grew 21%. As fleets transitioned from bequest to next-gen engines, ATI's contented per motor is increasing. With these newer platforms moving into service, we besides spot aftermarket request growing. Together, these dynamics make compounding maturation that strengthens our presumption twelvemonth aft year.