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Key Takeaways ATI's shares surged 129.9% as aerospace and defense demand drove growth and lifted its outlook.ATI's Q2 sales rose 13%, while record backlog hit $4.4 billion and defense revenue jumped 36%.ATI raised 2026 EBITDA, earnings and free cash flow guidance on stronger margins and demand. ATI Inc.’s (ATI - Free Report) shares have surged 129.9% in the past year, outperforming the Zacks Aerospace - Defense Equipment industry’s decline of 10.6% and the S&P 500’s 18.1% increase. ATI is benefiting from investments in capacity expansion coupled with consistent demand growth in its key sectors that aids volume growth and pricing. A raised outlook and margin expansion also boost investors’ confidence.

ATI’s peers, Carpenter Technology Corporation (CRS - Free Report) and Howmet Aerospace Inc. (HWM - Free Report) , have gained 56% and 17.9%, respectively, over the same period.

ATI’s One-year Price Performance Image Source: Zacks Investment Research

Technical indicators show that ATI is currently trading above its 200-day simple moving average (SMA), suggesting a long-term uptrend. The stock slipped below its 50-day SMA on Sept. 10, 2026. Following a golden crossover on May 29, 2025, the 50-day SMA is reading higher than the 200-day SMA, indicating a bullish trend.

ATI Trades Below 50-Day SMA Image Source: Zacks Investment Research

Let’s take a look at ATI’s fundamentals to analyze the stock better.

Aerospace and Defense Strength Fuels ATI’s GrowthATI benefits from strong aerospace and defense demand, supporting solid multi-year growth prospects. Aerospace remains a key growth engine, with rising aircraft and next-generation jet engine production fueling demand for ATI’s proprietary nickel-based superalloys, titanium products, forgings and other specialty materials. The increasing adoption of next-generation engines further enhances this opportunity, as these platforms require greater amounts of advanced alloys per engine. Expanding defense opportunities and long-term customer agreements are also improving revenue visibility. This favorable outlook is further supported by recent upward revisions to the company’s expectations for both segments.

In the second quarter of 2026, aerospace and defense sales rose 13% year over year, while backlog reached a record $4.4 billion, up 18%. Jet-engine revenues increased 13%, with management expecting high-teens full-year growth. Defense revenues surged 36% to a record high, supported by a renewed naval nuclear agreement through 2030 that is expected to more than double annual revenues versus the prior contract. ATI also expects mid- to high-single-digit airframe growth in 2026. ATI's content on next-generation engines is more than double that of legacy platforms, positioning the company to benefit from a higher number of newer aircraft platforms.

Margin Expansion and Capacity Investments Add UpsideATI's operational transformation is strengthening profitability. Second-quarter adjusted EBITDA jumped 37% year over year to $284.4 million, while margin expanded 440 basis points to 22.6%. The elevATIon program has increased throughput, while targeted titanium and nickel investments are expected to raise nickel capacity by 15-20% by early 2028 and support approximately $350 million of incremental annual nickel-based revenue. These initiatives, combined with a loyal customer base, position ATI for sustained earnings growth.

Raised Outlook Instills Investor Confidence in ATI StockFor full-year 2026, ATI raised adjusted EBITDA guidance to $1.14-$1.2 billion from its previous outlook of $1.01-$1.06 billion. Adjusted earnings guidance was increased to $4.9-$5.18 per share from $4.2-$4.48 previously. The company also lifted its full-year adjusted free cash flow forecast to $550-$600 million from the earlier range of $465-$525 million. Management expects targeted investments and operational execution to increase available capacity as demand for aerospace and defense materials remains strong.

Strong Financial Health Supports ATI’s Capital AllocationATI remains focused on enhancing shareholder value by strengthening and sustaining its cash flow generation. It reported first-half 2026 adjusted free cash flow of $143.2 million, up from a $50.2 million cash outflow during the same period in the previous year. The company is taking steps to reduce seasonality and improve the consistency of its cash flows. Strong free cash flow generation is being supported by higher adjusted EBITDA and improved operating performance, with healthy aerospace and defense demand expected to sustain cash generation.

Debt reduction, aided by stronger margins and improved cash flows, is enhancing ATI’s financial flexibility. The company also remains committed to returning capital to its shareholders through share repurchases, supported by disciplined and strategic capital allocation.

ATI considers buybacks the most efficient way to return capital to shareholders. It returned $470 million to its shareholders in 2025 in the form of share repurchases. Following the $50 million repurchase in the second quarter, ATI has $495 million remaining under its current buyback authorization.

ATI’s Earnings Estimates NorthboundThe Zacks Consensus Estimate for ATI’s 2026 earnings has been going up over the past 60 days. The consensus estimate for third-quarter 2026 earnings has also been revised upward over the same time frame.

The Zacks Consensus Estimate for 2026 earnings is currently pegged at $5.11, suggesting year-over-year growth of 57.7%. Earnings are expected to register roughly 58.8% growth in the third quarter.

Image Source: Zacks Investment Research

A Look at ATI’s ValuationATI is currently trading at a forward price-to-sales ratio of 4.65, below the industry. It is trading at a discount to Howmet Aerospace and Carpenter Technology. ATI currently has a Value Score of D, while both Howmet Aerospace and Carpenter Technology have a Value Score of F.

ATI’s P/S F12M Vs. Industry, HWM and CRS Image Source: Zacks Investment Research

Final Thoughts: Buy ATI SharesOperational enhancements, portfolio optimization, pricing gains and a favorable product mix are helping ATI achieve stronger incremental margins. Along with the “elevATIon” program, these initiatives are designed to improve productivity and maximize output from existing assets. Collectively, these gains are expected to support ATI’s growth momentum and provide further upside potential.

ATI’s solid financial health, improving cash flows and disciplined capital allocation also add to its appeal. With strong demand visibility and healthy earnings growth prospects, ATI appears well-positioned to deliver value to its investors, making this Zacks Rank #1 (Strong Buy) stock a prudent choice to bet on now.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways ATI's first-half adjusted free cash flow rose to $143.2M from a prior-year $50.2M cash outflow.Strong aerospace and defense demand, contract pricing gains and higher-value products support ATI's margins.ATI raised its 2026 adjusted free cash flow guidance to $550M-$600M from $465M-$525M. ATI Inc. (ATI - Free Report) is generating strong free cash flow, supported by higher adjusted EBITDA and improved operating performance. It reported first-half 2026 adjusted free cash flow of $143.2 million, up from a $50.2 million cash outflow during the same period in the previous year. Its robust cash generation is expected to continue as demand remains strong across aerospace and defense markets.

The company’s pricing improvements in its long-term contracts have enabled higher margins. It has also been focused on its higher-value aerospace and defense products. Growing demand for next-generation engines, naval nuclear programs and other defense applications, where its content on next-generation engines is more than double that of legacy platforms, positions ATI for an upbeat growth momentum. ATI’s targeted investments and operational improvements will further translate into higher production, enabling higher shipments.

These combined factors have led the company to raise its adjusted free cash flow guidance for 2026 from prior guidance of $465-$525 million to $550-$600 million. The guidance is also strengthened by its higher projection of adjusted EBITDA and adjusted EPS for full-year 2026.

Among its major peers, Carpenter Technology Corporation (CRS - Free Report) generated a higher adjusted free cash flow of $362.3 million for fiscal 2026 compared with $287.5 million in fiscal 2025. The improvements in product mix, higher realized prices, as well as expanded operating efficiencies support the expansion. For fiscal 2027, Carpenter Technologyexpects to generate free cash flow in the range of $400 million to $430 million.

Howmet Aerospace Inc. (HWM - Free Report) recorded free cash flow of roughly $838 million for the first six months of 2026, up from the previous-year period’s $478 million. This upside was backed by strong growth in the commercial aerospace, defense aerospace and gas turbines markets. Howmet expects full-year 2026 free cash flow to be in the range of $1,850-$1,950 million.

The Zacks Rundown for ATIShares of ATI have shot up 122.1% in the past year against the Zacks Aerospace - Defense Equipment industry’s decline of 9%.

Image Source: Zacks Investment Research

From a valuation standpoint, ATI is currently trading at a forward price-to-sales multiple of 4.45, a discount to the industry average of 7.12X. It carries a Value Score of D.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ATI’s 2026 and 2027 earnings implies a year-over-year rise of 54% and 23.7%, respectively. The EPS estimates for 2026 and 2027 have been trending higher over the past 30 days.

Image Source: Zacks Investment Research

ATI stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

3 Under-the-Radar Defense Stocks With Record BacklogsATI NYSE: ATI has transformed its portfolio toward aerospace and defense markets, with those end markets now representing about 70% of total revenue, President and CEO Kim Fields said during a Morgan Stanley aerospace and defense conference panel.

Fields said the company’s shift began in 2019, when ATI focused its AA&S segment on aerospace and defense applications and exited its Standard Stainless Sheet business, which had generated about $400 million in revenue at the time. ATI has since directed resources and investment toward differentiated products, including hafnium and zirconium materials used in commercial and naval nuclear programs, hypersonics, space launch applications and jet-engine alloys.

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3 Crucial Aerospace Component Makers That Analysts Love“Overall, from a company standpoint, we’ve increased our aerospace and defense percent of revenue up to 68%, 70% of our total revenue,” Fields said, compared with about 50% in 2019. Within AA&S, aerospace and defense revenue represented 44% of the segment’s sales over the past five years, more than double its prior proportion, she said.

Margins and Operational Progress Fields said ATI’s AA&S segment posted a roughly 22% margin in the second quarter, up from 14% a year earlier, while companywide margin reached 23%. She attributed the improvement to the company’s portfolio changes, commercial discipline and operating model, known as Elevation.

AI Fatigue? These 3 Analyst-Upgraded Stocks Offer Real Growth PotentialElevation includes procurement savings, operational improvements, commercial discipline and portfolio optimization, according to Fields. The company is using the program to improve yields, productivity and flow through capacity-constrained operations before adding new capacity.

ATI reported that EBITDA rose 57% year over year in the second quarter, Fields said. She added that the company was generating approximately 50% incremental margins and expected that level to continue through the rest of the year.

Looking ahead, Fields cited an implied EBITDA run rate of $1.35 billion entering 2027. She said the company expects momentum from a full year of pricing and contractual resets, new production assets and continuing operational improvements.

Differentiated Materials and Manufacturing Capabilities Fields identified four areas where ATI believes it is differentiated:

Proprietary jet-engine alloys, where ATI produces five of seven alloys used in the hot section of a jet engine as a full-source supplier, while sharing supply of a sixth alloy with another producer. Isothermal forging, a process used to manufacture jet-engine discs. Fields said ATI is one of two companies globally with that capability. Premium-quality titanium used in jet engines, missiles, defense applications and specialty energy markets. ATI is qualifying a new asset in Richland, Washington. Hafnium and zirconium materials, for which Fields said ATI is one of three qualified Western suppliers and the only independent supplier not serving a captive commercial nuclear business first. Fields said ATI’s materials expertise, process know-how and long-standing qualifications enable it to work with customers on performance requirements and next-generation product development.

Capacity Investments and Customer Support ATI is prioritizing improvements to its existing asset base but is also adding capacity in coordination with customers, Fields said. The company is commissioning remelt assets for a technical superalloy nickel capital project and expects to commission new primary-melt capacity at the end of next year.

Fields said ATI expects capital expenditures of between $280 million and $300 million this year, with approximately 20% funded by customers. Customer contributions provide capacity reservations rather than ownership of the assets, she said.

According to Fields, ATI applies a 30% internal rate of return target to capital projects before considering customer contributions. She said customer participation also helps speed qualification because customers prioritize engineering resources for the projects.

Demand Across Core Markets Fields said ATI is seeing demand across its core aerospace, defense and specialty energy markets. In aerospace, jet-engine demand includes maintenance, repair and overhaul activity that currently accounts for about 50% of ATI’s jet-engine business, in addition to original-equipment demand.

Defense revenue increased 36% in the latest quarter, she said. Naval nuclear programs, rotorcraft and fixed-wing platforms form the foundation of ATI’s defense business, while missile-related sales remain a smaller but faster-growing component. Fields said missile activity was up fourfold and cited orders and inquiries related to Tomahawk and THAAD programs.

Space remains a small market for ATI but offers growth potential, according to Fields. She said space applications use exotic alloys, including hafnium, zirconium, niobium-based alloys and titanium, in launch thrusters, propellant systems and structural applications.

Fields also pointed to demand for gas turbines and nuclear-related applications within specialty energy. She said the same assets can serve multiple markets, increasing competition for ATI’s capacity and supporting pricing, mix and share-gain opportunities.

Addressing GE’s acquisition of casting supplier CPP, Fields said ATI does not produce castings and has limited direct exposure to CPP. However, she said the transaction reflects broader industry recognition that scarce, specialized manufacturing capabilities require sustained investment to avoid supply-chain bottlenecks.

ATI’s immediate priorities are to execute for customers, improve output from existing assets, invest selectively in future capacity and capture the value created by its specialized products, Fields said.

About ATI (NYSE:ATI)ATI Inc NYSE: ATI is a specialty materials and components manufacturer serving aerospace and defense, medical, energy, transportation, and other demanding industrial markets. The company develops and produces advanced alloys and engineered materials designed to perform in high-temperature, corrosive, and high-stress environments.

ATI's products include nickel-based superalloys, titanium and titanium-based materials, specialty stainless steels, zirconium and other specialty alloys. Its manufacturing capabilities also include precision forgings, castings, rolled products, and machined components used in aircraft engines, airframes, power-generation equipment, medical devices, and industrial applications.

The company was formed in 1996 through the combination of Allegheny Ludlum Corporation and Teledyne, Inc's specialty metals operations and adopted the name ATI Inc in 2021.

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Key Takeaways ATI shares are up 64% YTD as aerospace and defense demand, backlog growth and margins strengthen.Jet-engine revenue rose 13% in Q2 2026, while defense sales jumped 36% to a record $162 million.ATI raised 2026 adjusted EBITDA to $1.135-$1.185B and free cash flow guidance to $550-$600M. ATI Inc. (ATI - Free Report) shares have rallied 64% year to date.The company has also outperformed the Zacks Aerospace - Defense Equipment industry’s 6% decline and the S&P 500’s roughly 11.4% increase over the same period.

Image Source: Zacks Investment Research

Let's take a look at the factors driving ATI stock.

Aerospace Strength and Higher Margins Fuel Growth

ATI is supported by robust aerospace and defense demand, a record backlog and improving profitability. The company continues to benefit from strong production rates across the commercial aerospace industry that aided jet-engine revenue, increasing 13% year over year in the second quarter of 2026.

Defense sales were even stronger, rising 36% to a record $162 million. Following this, ATI also raised its full-year defense growth outlook to the high teens. A record $4.4 billion backlog, up 18% year over year and 7% sequentially, provides strong visibility into future sales. ATI is also well positioned to capitalize on growing demand for next-generation engines, naval nuclear programs and other defense applications, where its content on next-generation engines is more than double that of legacy platforms.

Margin Expansion and Raised Outlook Instill Investor Confidence

ATI’s earnings growth is boosting confidence in stronger profitability. Second-quarter adjusted EBITDA jumped 37% to $284.4 million, while the adjusted EBITDA margin expanded 440 basis points to 22.6%. Pricing, favorable product mix, higher volumes and productivity initiatives are supporting the margin gains.

The company also raised its 2026 adjusted EBITDA outlook to $1.135-$1.185 billion and adjusted free cash flow guidance to $550-$600 million. Targeted capacity investments and ATI’s newly adopted elevATIon program to maximize productivity of existing assets will also yield significant benefits.

ATI’s Zacks Rank & Key Picks

ATI currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Avient Corporation (AVNT - Free Report) .

While RS currently sports a Zacks Rank #1, CRS and AVNT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $22.23 per share, indicating a 55.89% year-over-year increase. RSshares have gained 32.3% over the past year.

The Zacks Consensus Estimate for CRS’ fiscal 2027 earnings is pegged at $13.28 per share, indicating a rise of 23.42% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.39%.

The Zacks Consensus Estimate for AVNT’s current-year earnings is pinned at $3.2 per share, indicating a 13.48% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%. AVNT’sshares have gained 15% over the past year.

Key Takeaways ATI's $4.4B backlog rose 18% year over year, supporting revenue visibility in aerospace and defense.ATI plans to lift nickel capacity 15-20% by early 2028, targeting $350M in added annual nickel revenues.ATI raised 2026 adjusted EBITDA guidance to $1.135-$1.185B and adjusted EPS guidance to $4.90-$5.18. ATI Inc. (ATI - Free Report) shares have rallied 27.6% over the past three months.The company has also outperformed the Zacks Aerospace - Defense Equipment industry’s 5.6% decline and the S&P 500’s roughly 1.7% increase over the same period.

Image Source: Zacks Investment Research

Let's take a look at the factors driving ATI stock.

Record Backlog, Capacity Expansions & Raised Outlook Drive ATIATI's growth is being driven by strong demand across its core market segments, particularly aerospace and defense, supported by a record backlog. The backlog reached $4.4 billion at the end of the second quarter, up 18% year over year, providing strong revenue visibility as aircraft production and defense demand continue to expand.

Aerospace remains a key growth engine, with increasing production rates for aircraft and next-generation jet engines boosting demand for ATI's proprietary nickel-based superalloys, titanium products, forgings and specialty materials. The growing adoption of next-generation jet engines further strengthens this opportunity, as these platforms require higher content of advanced alloys per engine. Increasing defense opportunities and long-term customer agreements are also providing greater revenue visibility. The visibility is also underlined by optimistic outlook revisions in both segments.

ATI is further strengthening its position through targeted investments that expand existing capacity. Its nickel investments are targeted to raise nickel capacity by 15-20% by early 2028 from year-end 2025 levels and support about $350 million of incremental annual nickel-based revenues by 2028.

ATI's profitability has also improved sharply. Second-quarter adjusted EBITDA rose 37% year over year to $284 million, while the adjusted EBITDA margin expanded to 22.6% from 18.2% a year earlier.

The company also raised its full-year 2026 adjusted EBITDA guidance to $1.135-$1.185 billion from $1.01-$1.06 billion and increased adjusted EPS guidance to $4.90-$5.18 from $4.20-$4.48. Adjusted free cash flow guidance was also raised to $550-$600 million.

Operational improvements, structural changes in the portfolio, pricing gains and a richer product mix are helping ATI generate stronger incremental margins. These factors, along with the “elevATIon" program, are intended to increase productive output from existing assets. Together, these gains are expected to act as a catalyst to ATI’s upside growth momentum.

ATI’s Zacks Rank & Other Key Picks

ATI currently sports a Zacks Rank #1 (Strong Buy). 

Some other top-ranked stocks in the Basic Materials space are Neo Performance Materials Inc. (NOPMF - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Avient Corporation (AVNT - Free Report) .

While NOPMF currently sports a Zacks Rank #1, CRS and AVNT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NOPMF’s 2026 earnings is pinned at $1.4 per share, indicating a 185.71% year-over-year increase. NOPMF’sshares have gained 104% over the past year.

The Zacks Consensus Estimate for CRS’ fiscal 2027 earnings is pegged at $12.92 per share, indicating a rise of 20.07% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.39%.

The Zacks Consensus Estimate for AVNT’s current-year earnings is pinned at $3.2 per share, indicating a 13.48% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%. AVNT’sshares have gained 18.6% over the past year.

ATI Exceeds the High End of Q2 Guidance and Raises Full-Year Outlook 
GAAP diluted EPS up 56% year-over-year
Net income attributable to ATI increased 50%, adjusted EBITDA rose 37% year-over-year
Adjusted EBITDA margin expanded 440 basis points to 22.6% year-over-year

Second Quarter 2026 GAAP Financial Results

Sales of $1.26 billion, up 11% year-over-year, driven by a 13% aerospace & defense increase Net income attributable to ATI of $151 million, up 50% year-over-year Earnings per share of $1.09 compared to $0.70 per share in second quarter 2025 Second Quarter 2026 Non-GAAP Financial Information(a)

Adjusted net income attributable to ATI(a) of $170 million, up 60% year-over-year Adjusted earnings per share(a) of $1.23, compared to $0.74 per share in second quarter 2025 Adjusted EBITDA(a) of $284 million, an increase of 37% year-over-year Adjusted EBITDA(a) as a percentage of sales of 22.6%, compared to 18.2% in second quarter 2025 Guidance
The Company is providing third quarter and updated full-year 2026 guidance in the table below.

Current Guidance

Prior Guidance

Q3 2026

Full Year 2026

Full Year 2026

Adjusted EBITDA(b)

$305M - $315M

$1,135M - $1,185M

$1,010M - $1,060M

Adjusted Earnings Per Share(b)

$1.31 - $1.37

$4.90 - $5.18

$4.20 - $4.48

Adjusted Free Cash Flow(b)

$550M - $600M

$465M - $525M

(a) Reconciliations of the reported information under accounting principles generally accepted in the United States (GAAP) to non-GAAP financial measures are included in accompanying financial tables. Non-GAAP financial measures should be viewed in addition to, and not superior to or as an alternative for, the Company's reported results prepared in accordance with GAAP.

(b) Detailed reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are not available without unreasonable effort due to the complexity of the excluded components.

, /PRNewswire/ -- ATI Inc. (NYSE: ATI) reported second quarter 2026 results, with sales of $1.26 billion and net income attributable to ATI of $151 million, or $1.09 per share.

Sequential 

Y-O-Y

($ in millions except per share amounts)

Q2 2026

Q1 2026

Change

Q2 2025

Change 

Sales

$1,261.1

$1,151.5

10 %

$1,140.4

11 %

Net income attributable to ATI

$151.0

$118.2

28 %

$100.7

50 %

Earnings per share

$1.09

$0.85

28 %

$0.70

56 %

Non-GAAP information(a)

Adjusted net income attributable to ATI(a)

$169.7

$139.2

22 %

$106.4

59 %

Adjusted earnings per share(a)

$1.23

$1.00

23 %

$0.74

66 %

ATI adjusted EBITDA(a)

$284.4

$231.7

23 %

$207.7

37 %

Second quarter 2026 GAAP earnings per share were $1.09 and adjusted earnings per share(a) were $1.23. Net income attributable to ATI was $151.0 million and ATI adjusted EBITDA(a) was $284.4 million, or 22.6% of sales. Second quarter 2026 GAAP and non-GAAP results include a gain of $9.9 million, or $0.06 per share, from the sale of a previously closed manufacturing facility in the AA&S segment.

Second quarter 2026 adjusted results exclude pre-tax charges of $23.6 million for special items consisting of $10.1 million of start-up and transaction-related costs, $7.0 million of transformation-related costs, $3.9 million of restructuring-related costs, and $2.6 million of losses on the sale of customer accounts receivable. The after-tax impact of these special items was a charge of $18.7 million, or $0.14 per share. 

First quarter 2026 adjusted results exclude pre-tax charges of $26.4 million for special items consisting of $11.1 million of start-up and transaction costs, $8.1 million of restructuring-related costs, $4.8 million of transformation costs, and $2.4 million of losses on the sale of customer accounts receivable. The after-tax impact of these special items was a charge of $21.0 million, or $0.15 per share. Second quarter 2025 adjusted results exclude pre-tax charges of $7.4 million for special items. The after-tax impact of these special items was a charge of $5.7 million, or $0.04 per share. The Non-GAAP tables included within this release provide the reconciliations of the GAAP to Non-GAAP financial measures and additional details on the special items noted above.

"We delivered another solid quarter, with results above the high end of our guidance and adjusted EBITDA up 37% year-over-year on 11% sales growth. This is a clear example of the earnings potential we've been building across both of our segments. Adjusted EBITDA margin expanded 440 basis points to 22.6%, and our backlog reached another record at $4.4 billion, up 18% year-over-year, as demand for our unique aerospace and defense materials continues to outpace available supply," said Kimberly A. Fields, Board Chair, President and CEO. "This quarter reflects the continued evolution of ATI's portfolio toward a more differentiated, higher-margin business, anchored by long-term customer agreements and concentrated exposure in aerospace, defense and specialty energy.

"Momentum is carrying into the second half, and we are again raising our full-year guidance for adjusted earnings, EBITDA and free cash flow," Fields added. "Our outlook is supported by contracted pricing improvements, a richer product mix and increasing production volumes as targeted investments and operational execution expand our available capacity."

Operating Results by Segment

High Performance Materials & Components (HPMC)

($ millions)

Q2 2026

Q1 2026

Q2 2025

Sales

$637.1

$614.3

$608.8

Segment EBITDA(a)

$153.5

$152.9

$144.0

% of Sales

24.1 %

24.9 %

23.7 %

HPMC's second quarter 2026 sales increased $22.8 million, or 4%, compared to first quarter 2026, primarily due to strong demand and pricing for commercial jet engine products. Aerospace & defense sales represented 93% of total HPMC sales in second quarter 2026, unchanged from first quarter 2026.  Second quarter 2026 sales increased 5% compared to second quarter 2025, primarily driven by a 10% increase in commercial jet engine sales due to strong demand and pricing.  HPMC second quarter 2026 segment EBITDA(a) was $153.5 million, or 24.1% of sales. The sequential decline in segment EBITDA margin was primarily due to higher manufacturing and period costs, including costs associated with revised qualification requirements for our new facility in Mexico and titanium electron-beam furnace. The higher costs were partially offset by increased volume and favorable pricing of jet engine nickel products. The year-over-year increase in the segment EBITDA margin rate was primarily due to higher volume and favorable pricing, partially offset by higher manufacturing and period costs. Advanced Alloys & Solutions (AA&S)

($ millions)

Q2 2026

Q1 2026

Q2 2025

Sales

$624.0

$537.2

$531.6

Segment EBITDA(a)

$147.6

$97.0

$76.7

% of Sales

23.7 %

18.1 %

14.4 %

AA&S second quarter 2026 sales increased $86.8 million, or 16%, compared to first quarter 2026, primarily due to higher sales in the aerospace & defense and conventional energy markets. Aerospace & defense sales increased 19%, driven by higher demand and pricing and represented 44% of total AA&S sales in the second quarter of 2026. The increase in conventional energy sales was mostly due to demand timing. Second quarter 2026 sales increased $92.4 million, or 17%, compared to the prior year quarter, primarily due to higher sales to the aerospace & defense and conventional energy markets. On a year-over-year basis, aerospace & defense sales grew by 34%, including a 90% increase in defense sales, reflecting both higher demand and pricing.  AA&S second quarter 2026 segment EBITDA(a) was $147.6 million, or 23.7% of sales, inclusive of a $9.9 million gain from the sale of a previously closed manufacturing facility. Excluding the impact of the gain, the sequential and year-over-year increase in segment EBITDA margin was primarily driven by higher pricing and favorable mix. Corporate Items and Cash

Restructuring and other charges: Second quarter 2026: $23.6 million includes pre-tax charges consisting of $10.1 million of start-up and transaction-related costs, $7.0 million of transformation-related costs, $3.9 million of restructuring-related costs for severance and facility rationalization activities, and $2.6 million of losses on the sale of customer accounts receivable. First quarter 2026: $26.4 million includes pre-tax charges consisting of $11.1 million of start-up and transaction-related costs, $8.1 million of restructuring-related severance and impairment costs due to facility rationalization activities, $4.8 million of transformation-related costs, and $2.4 million of losses on the sale of customer accounts receivable. Second quarter 2025: $8.7 million includes pre-tax charges consisting of $7.1 million for start-up and transaction-related costs and $1.6 million of losses on the sale of customer accounts receivable. These pre-tax charges were partially offset by credits of $1.3 million due to a reduction in severance-related reserves for a previous restructuring in our AA&S segment.  Corporate expenses in the second quarter 2026 were $14.9 million, compared to $17.0 million in the first quarter 2026, and $15.4 million in the prior year quarter. The decrease compared to first quarter 2026 was primarily due to a benefit from an insurance claim, partially offset by higher incentive compensation expense. Corporate expenses were relatively flat on a year-over-year basis. Closed operations and other income/expense was an expense of $1.8 million in the second quarter 2026 compared to expense of $1.2 million in the first quarter 2026, and income of $2.4 million in the prior year quarter. The increase in expense compared to first quarter 2026 was primarily due to changes in environmental reserves. Second quarter 2025 benefited from foreign exchange gains of $1.8 million and a favorable bankruptcy settlement related to an insurance claim of $1.1 million. The second quarter 2026 effective tax rate was 20.0%, compared to an effective tax rate of 11.8% in first quarter 2026 and 22% in second quarter 2025. The higher effective tax rate on a sequential basis was primarily due to the timing and amount of discrete tax benefits, mostly for share-based compensation. The year-over-year comparison was also affected by tax law changes from the One Big Beautiful Bill Act. Cash provided by operating activities was $131.8 million for second quarter 2026, while capital expenditures were $68.6 million. Managed working capital as a percent of annualized sales was 34.3% at the end of second quarter 2026, a decrease of 50 basis points compared to the end of first quarter 2026. In the second quarter 2026, the Company repurchased $50 million of its common stock at an average price per share of $159.53, retiring approximately 0.3 million shares. As of the end of second quarter 2026, total share repurchase authorization remaining was $495 million. ATI will conduct a conference call with investors and analysts on Thursday, August 6, 2026, at 8:30 a.m. ET to discuss the financial results. The conference call will be broadcast, and accompanying presentation slides will be available, at ATImaterials.com. To access the broadcast, click on "Conference Call." A replay of the conference call will be available on the ATI website.

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this news release relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements, which may contain such words as "anticipates," "believes," "estimates," "expects," "would," "should," "will," "will likely result," "forecast," "outlook," "projects," and similar expressions, are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control. Our performance or achievements may differ materially from those expressed or implied in any forward-looking statements due to the following factors, among others: (a) material adverse changes in economic or industry conditions generally, including global supply and demand conditions and prices for our specialty materials; (b) material adverse changes in the markets we serve; (c) our inability to achieve the level of cost savings, productivity improvements, synergies, growth or other benefits anticipated by management from strategic investments and the integration of acquired businesses; (d) volatility in the price and availability of the raw materials that are critical to the manufacture of our products; (e) declines in the value of our defined benefit pension plan assets or unfavorable changes in laws or regulations that govern pension plan funding; (f) labor disputes or work stoppages; (g) equipment outages; (h) business and economic disruptions associated with extraordinary events beyond our control, such as war, terrorism, international conflicts, public health issues, such as epidemics or pandemics, natural disasters and climate-related events that may arise in the future and (i) other risk factors summarized in our Annual Report on Form 10-K for the year ended December 28, 2025, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements.

ATI: Proven to Perform.
ATI (NYSE: ATI) is a global producer of high performance materials and solutions for the global aerospace & defense markets, and critical applications in electronics, medical and specialty energy. We're solving the world's most difficult challenges through materials science. We partner with our customers to deliver extraordinary materials that enable their greatest achievements: their products fly higher and faster, burn hotter, dive deeper, stand stronger and last longer. Our proprietary process technologies, unique customer partnerships and commitment to innovation deliver materials and solutions for today and the evermore challenging environments of tomorrow. We are proven to perform anywhere. Learn more at ATImaterials.com.

ATI Inc.

Consolidated Statements of Operations

(Unaudited, dollars in millions, except per share amounts)

Fiscal Quarter Ended

Fiscal Year-To-Date
Period Ended

June 28,

March 29,

June 29,

June 28,

June 29,

2026

2026

2025

2026

2025

Sales

$   1,261.1

$    1,151.5

$    1,140.4

$   2,412.6

$   2,284.8

Cost of sales

951.3

888.6

897.9

1,839.9

1,806.5

Gross profit

309.8

262.9

242.5

572.7

478.3

Selling and administrative expenses

95.7

92.1

82.8

187.8

167.8

Restructuring (credits) charges

3.9

7.0

(1.3)

10.9

(1.3)

(Gain) loss on asset sales and sales of
businesses, net

(9.8)

—

—

(9.8)

3.9

Operating income

220.0

163.8

161.0

383.8

307.9

Nonoperating retirement benefit expense

(4.3)

(4.3)

(4.1)

(8.6)

(8.0)

Interest expense, net

(23.9)

(23.7)

(25.4)

(47.6)

(48.4)

Other income, net

1.1

0.8

1.8

1.9

3.3

Income before income taxes

192.9

136.6

133.3

329.5

254.8

Income tax provision

38.6

16.1

29.3

54.7

50.3

Net income

$     154.3

$      120.5

$      104.0

$     274.8

$     204.5

Less: Net income attributable to noncontrolling
interests

3.3

2.3

3.3

5.6

6.8

Net income attributable to ATI

$     151.0

$      118.2

$      100.7

$     269.2

$     197.7

Basic net income attributable to ATI per
common share

$       1.11

$        0.86

$        0.72

$       1.97

$       1.40

Diluted net income attributable to ATI per
common share

$       1.09

$        0.85

$        0.70

$       1.94

$       1.38

ATI Inc.

Selected Financial Data

(Unaudited, dollars in millions)

Fiscal Quarter Ended

Fiscal Year-To-Date
Period Ended

June 28,

March 29,

June 29,

June 28,

June 29,

2026

2026

2025

2026

2025

Sales:

High Performance Materials & Components

$   637.1

$   614.3

$   608.8

$ 1,251.4

$ 1,192.9

Advanced Alloys & Solutions

624.0

537.2

531.6

1,161.2

1,091.9

Total external sales

$ 1,261.1

$ 1,151.5

$ 1,140.4

$ 2,412.6

$ 2,284.8

Segment EBITDA(a):

High Performance Materials & Components

$   153.5

$   152.9

$   144.0

$   306.4

$   275.0

% of Sales

24.1 %

24.9 %

23.7 %

24.5 %

23.1 %

Advanced Alloys & Solutions

147.6

97.0

76.7

244.6

160.1

% of Sales

23.7 %

18.1 %

14.4 %

21.1 %

14.7 %

Corporate, Closed Operations and Other (Income) Expense(b):

Corporate expense

$    14.9

$    17.0

$    15.4

$    31.9

$    32.8

Closed operations and other (income) expense

1.8

1.2

(2.4)

3.0

—

Total Corporate, Closed Operations and
Other expense

$    16.7

$    18.2

$    13.0

$    34.9

$    32.8

Depreciation & Amortization:

High Performance Materials & Components

$    20.6

$    19.6

$    20.9

$    40.2

$    40.6

Advanced Alloys & Solutions

21.8

23.7

19.1

45.5

38.6

Other

1.6

1.7

1.6

3.3

3.2

Total depreciation & amortization

$    44.0

$    45.0

$    41.6

$    89.0

$    82.4

Percentage of Total ATI Sales(c):

Nickel-based alloys and specialty alloys

51 %

49 %

48 %

50 %

48 %

Precision forgings, castings and components

18 %

20 %

21 %

19 %

21 %

Titanium and titanium-based alloys

15 %

17 %

17 %

16 %

18 %

Zirconium and related alloys

11 %

9 %

9 %

10 %

8 %

Precision rolled strip products

5 %

5 %

5 %

5 %

5 %

Total

100 %

100 %

100 %

100 %

100 %

(a) The Company's Chief Operating Decision Maker ("CODM") utilizes Segment EBITDA as a key metric to evaluate segment performance. Our measure of segment EBITDA, which we use to analyze the performance and results of our business segments, excludes net interest expense, income taxes, depreciation and amortization, special charges, unallocated corporate expenses, closed operations and other income (expense). See the Company's Form 10-Q for the reconciliation of Segment EBITDA to Income before taxes.

(b) Amounts exclude depreciation & amortization expense.

(c) Hot-Rolling and Processing Facility conversion service sales in the AA&S segment are excluded from this presentation.

ATI Inc.

Condensed Consolidated Balance Sheets

(Unaudited, dollars in millions)

June 28,

December 28,

2026

2025

ASSETS

Current Assets:

Cash and cash equivalents

$                  783.0

$                  416.7

Accounts receivable, net of allowances for doubtful accounts

646.6

686.1

Short-term contract assets

95.9

72.8

Inventories, net

1,667.5

1,403.2

Prepaid expenses and other current assets

87.4

101.2

   Total Current Assets

3,280.4

2,680.0

Property, plant and equipment, net

1,980.7

1,940.6

Goodwill

225.2

225.2

Other assets

252.6

253.8

Total Assets

$               5,738.9

$               5,099.6

LIABILITIES AND EQUITY

Current Liabilities:

Accounts payable

$                  656.6

$                  568.2

Accrued liabilities

208.9

240.5

Short-term contract liabilities

143.5

146.4

Short-term debt and current portion of long-term debt

383.6

31.1

Other current liabilities

17.1

20.1

   Total Current Liabilities

1,409.7

1,006.3

Long-term debt

1,808.4

1,718.3

Accrued postretirement benefits

150.8

158.5

Pension liabilities

43.2

41.4

Other long-term liabilities

328.6

258.4

Total Liabilities

3,740.7

3,182.9

Total ATI stockholders' equity

1,876.7

1,804.5

Noncontrolling interests

121.5

112.2

Total Equity

1,998.2

1,916.7

Total Liabilities and Equity

$               5,738.9

$               5,099.6

ATI Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, dollars in millions)

Fiscal Year-To-Date Period Ended

June 28,

June 29,

2026

2025

Operating Activities:

Net income

$                  274.8

$                  204.5

Depreciation and amortization

89.0

82.4

Non-cash restructuring charges, net

5.1

—

Share-based compensation

14.1

14.6

Deferred taxes

17.5

33.5

Net gain from disposal of property, plant and equipment

(9.8)

0.2

Net loss on sales of businesses

3.7

Changes in operating assets and liabilities:

Inventories

(266.0)

(50.6)

Accounts receivable

39.8

(71.9)

Accounts payable

90.2

(56.0)

Retirement benefits

(3.2)

(4.1)

Accrued liabilities and other

8.5

(87.3)

Cash provided by operating activities

260.0

69.0

Investing Activities:

Purchases of property, plant and equipment

(123.8)

(125.4)

Proceeds from disposal of property, plant and equipment

5.6

0.1

Proceeds from sales of businesses, net of transaction costs

1.4

2.0

Other

—

4.1

Cash used in investing activities

(116.8)

(119.2)

Financing Activities:

Proceeds from issuance of senior notes

450.0

—

Repayment of finance lease obligations

(16.7)

(16.3)

Net borrowings under international credit facilities

2.5

—

Debt issuance costs

(5.7)

—

Purchase of treasury stock

(125.0)

(320.0)

Taxes on share-based compensation and other

(81.7)

(29.5)

Cash provided by (used in) financing activities

223.4

(365.8)

Effect of exchange rate changes on cash and cash equivalents

(0.3)

14.4

Increase (decrease) in cash and cash equivalents

366.3

(401.6)

Cash and cash equivalents at beginning of period

416.7

721.2

Cash and cash equivalents at end of period

$                  783.0

$                  319.6

ATI Inc.

Revenue by Market

(Unaudited, dollars in millions)

Fiscal Quarter Ended

Fiscal Year-To-Date Period
Ended

June 28,

March 29,

June 29,

June 28,

June 29,

2026

2026

2025

2026

2025

Aerospace & Defense:

Jet Engines-
Commercial

$ 508.3

40 %

$ 472.0

41 %

$ 447.8

39 %

$ 980.3

41 %

$ 869.2

38 %

Airframes- Commercial

191.7

15 %

186.6

16 %

195.2

17 %

378.3

16 %

401.0

17 %

Defense

162.0

13 %

139.0

12 %

118.8

11 %

301.0

12 %

246.0

11 %

Total Aerospace &
Defense

862.0

68 %

797.6

69 %

761.8

67 %

1,659.6

69 %

1,516.2

66 %

Other Markets:

Specialty Energy

59.2

5 %

61.6

5 %

63.5

6 %

120.8

5 %

114.0

5 %

Electronics

38.2

3 %

28.3

3 %

43.7

4 %

66.5

3 %

83.3

4 %

Medical

23.0

2 %

27.5

3 %

38.9

3 %

50.5

2 %

81.3

4 %

Automotive

72.3

6 %

61.5

5 %

64.8

6 %

133.8

5 %

125.4

5 %

Conventional Energy

103.5

8 %

84.2

7 %

92.9

8 %

187.7

8 %

214.7

9 %

Construction/Mining

34.9

3 %

39.0

3 %

33.3

3 %

73.9

3 %

66.2

3 %

Other

68.0

5 %

51.8

5 %

41.5

3 %

119.8

5 %

83.7

4 %

Total Other Markets

$ 399.1

32 %

$ 353.9

31 %

$ 378.6

33 %

$ 753.0

31 %

$ 768.6

34 %

Total

$          1,261.1

100 %

$          1,151.5

100 %

$          1,140.4

100 %

$          2,412.6

100 %

$          2,284.8

100 %

ATI Inc.

Computation of Basic and Diluted Earnings Per Share Attributable to ATI

(Unaudited, dollars in millions, except per share amounts)

Fiscal Quarter Ended

Fiscal Year-To-Date
Period Ended

June 28,

March 29,

June 29,

June 28,

June 29,

2026

2026

2025

2026

2025

Numerator for Basic net income per common share -

Net income attributable to ATI

$    151.0

$    118.2

$    100.7

$    269.2

$    197.7

Denominator for Basic net income per common share -

Weighted average shares outstanding

136.3

136.7

139.8

136.5

140.7

Effect of dilutive securities:

Share-based compensation

2.0

1.9

3.3

2.0

3.0

Denominator for Diluted net income per common
share -

Adjusted weighted average shares and assumed
conversions

138.3

138.6

143.1

138.5

143.7

Basic net income attributable to ATI per common share

$     1.11

$     0.86

$     0.72

$     1.97

$     1.40

Diluted net income attributable to ATI per common
share

$     1.09

$     0.85

$     0.70

$     1.94

$     1.38

ATI Inc.
Non-GAAP Financial Measures
(Unaudited, dollars in millions, except per share amounts)

The Company reports its financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This report includes financial performance measures that are not defined by GAAP, including Adjusted net income attributable to ATI, Adjusted EPS, Adjusted EBITDA, Segment EBITDA, Adjusted free cash flow and Managed working capital. The Company uses these non-GAAP financial measures to assist in assessing operating performance on a consistent basis across multiple reporting periods by removing the impact of special items, which can vary from period to period, that management does not believe are directly reflective of the Company's core operations. The Company defines special items as significant non-recurring or non-operational charges or credits, restructuring and other charges/credits, gains or losses from the sale of accounts receivable, strike related costs, goodwill and long-lived asset impairments, debt extinguishment charges, pension remeasurement gains and losses, other postretirement/pension curtailment and settlement gains and losses, and gains or losses on sales of businesses.

Adjusted net income attributable to ATI and related Adjusted EPS are calculated by adjusting net income attributable to ATI for the tax-effected impact of special items. We define Adjusted EBITDA as net income, excluding net interest expense, income taxes, depreciation and amortization, and special items. Our measure of segment EBITDA, which we use to analyze the performance and results of our business segments, excludes net interest expense, income taxes, depreciation and amortization, special charges, corporate expenses, closed operations and other income (expense). Our methods of calculating Adjusted free cash flow and Managed working capital are discussed in greater detail below under the headings "Adjusted Free Cash Flow" and "Managed Working Capital," respectively.

Management believes presenting these non-GAAP financial measures is useful to investors because it (1) provides investors with meaningful supplemental information regarding financial and operating performance by excluding certain items management believes do not directly impact the Company's core operations, (2) permits investors to view performance using the same metrics that management uses to forecast, evaluate performance, and make operating and strategic decisions, and (3) provides additional information on a period-to-period consistent basis using measures commonly used to analyze companies' operating performance. Management believes that consideration of these non-GAAP financial measures, together with our GAAP financial measures and the corresponding reconciliations, provides investors with a better understanding of the Company's performance and trends that would be absent such disclosures.

Non-GAAP financial measures should be viewed in addition to, and not superior to or as an alternative for, the Company's reported results prepared in accordance with GAAP. The following tables provide the calculation of the non-GAAP financial measures discussed in this press release:

Net Income Attributable to ATI

Fiscal Quarter Ended

June 28, 2026

March 29, 2026

June 29, 2025

EPS

EPS

EPS

Net income attributable to ATI

$     151.0

$  1.09

$     118.2

$  0.85

$     100.7

$  0.70

Adjustments for special items, pre-tax:

Restructuring and other charges(a)

23.6

26.4

7.4

Pension remeasurement loss(b)

—

—

—

Loss (gain) on sales of businesses(c)

—

—

—

Total pre-tax adjustments for special items

23.6

0.17

26.4

0.19

7.4

0.05

Income tax on adjustments for special items    

(4.9)

(0.03)

(5.4)

(0.04)

(1.7)

(0.01)

Adjusted Net income attributable to ATI

$     169.7

$  1.23

$     139.2

$  1.00

$     106.4

$  0.74

Earnings before interest, taxes, depreciation and amortization
(EBITDA)

Fiscal Quarter Ended

June 28, 2026

March 29, 2026

June 29, 2025

Net income attributable to ATI

$                151.0

$                118.2

$                100.7

Net income attributable to noncontrolling
interests

3.3

2.3

3.3

Net income

154.3

120.5

104.0

(+) Depreciation and amortization

44.0

45.0

41.6

(+) Interest expense

23.9

23.7

25.4

(+) Income tax provision

38.6

16.1

29.3

EBITDA

260.8

205.3

200.3

Adjustments for special items, pre-tax:

(+) Restructuring and other charges(a)

23.6

26.4

7.4

(+) Pension remeasurement loss(b)

—

—

—

(+/-) Loss (gain) on sales of businesses(c)

—

—

—

Adjusted EBITDA

$                284.4

$                231.7

$                207.7

(a) Second quarter 2026 includes pre-tax charges of $23.6 million consisting of $10.1 million of start-up and transaction-related costs, $7.0 million of transformation-related costs, $3.9 million of restructuring-related costs for severance and facility rationalization activities, and $2.6 million of losses on the sale of customer accounts receivable. First quarter 2026 includes pre-tax charges of $26.4 million consisting of $11.1 million of start-up and transaction-related costs, $8.1 million of restructuring-related severance and impairment costs primarily due to facility rationalization activities, $4.8 million of transformation-related costs, and $2.4 million of losses on the sale of customer accounts receivable. Second quarter 2025 includes pre-tax charges of $7.4 million primarily for start-up and transaction-related costs.

Adjusted Free Cash Flow

Management uses a non-GAAP measure, Adjusted free cash flow, to assess the cash flow generation of the Company's operations. Adjusted free cash flow is defined as the total cash provided by (used in) operating activities and investing activities as presented on the consolidated statements of cash flows, adjusted to exclude cash contributions to the Company's U.S. qualified defined benefit pension plan. 

Management utilizes this measure to assess the cash flow generation performance of its business as it excludes cash contributions to the Company's U.S. qualified defined benefit pension plan that are periodic rather than recurring. The impact of cash generated from the sale of assets and non-core businesses is included in the measure as the proceeds of such transactions are considered by Management in setting capital budgets to fund capital expenditures. Management believes this measure provides investors with additional meaningful insights as to the Company's ability to generate cash in excess of operational and investing needs. Adjusted free cash flow is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest, tax, or other contractually required payments. Further, adjusted free cash flow should be viewed in addition to, and not superior to or as an alternative for, the Company's reported results prepared in accordance with GAAP.

Fiscal Quarter Ended

Fiscal Year-To-Date Period
Ended

June 28, 2026

June 29, 2025

June 28, 2026

June 29, 2025

Cash provided by operating activities

$           131.8

$           161.5

$           260.0

$            69.0

Add back: Cash contributions to U.S.
qualified defined benefit pension plan

—

—

—

—

Cash provided by operating activities
excluding pension contributions

131.8

161.5

260.0

69.0

Cash used in investing activities

(63.2)

(68.6)

(116.8)

(119.2)

Adjusted Free Cash Flow

$            68.6

$            92.9

$           143.2

$           (50.2)

Managed Working Capital

As part of managing the performance of our business, we focus on Managed working capital, a non-GAAP financial measure that we define as gross accounts receivable, short-term contract assets and gross inventories, excluding the effects of reserves for uncollectible accounts receivable and inventory valuation reserves, less accounts payable and short-term contract liabilities. We assess Managed working capital performance as a percentage of the prior three months' annualized sales. Managed working capital is not intended to replace working capital or other GAAP financial measures or to be used as a measure of liquidity.

Management believes this non-GAAP financial measure focuses on the assets and liabilities most closely attributable to our core operations, allowing Management to quantify and evaluate the asset intensity of our business. Further, Management believes this non-GAAP financial measure provides investors with additional insights into the Company's effectiveness in balancing the need to maintain appropriate asset levels to support sales growth and operations while deploying our cash effectively. 

June 28,

March 29,

December 28,

2026

2026

2025

Accounts receivable

$               646.6

$               664.4

$               686.1

Short-term contract assets

95.9

63.1

72.8

Inventory

1,667.5

1,580.3

1,403.2

Accounts payable

(656.6)

(654.9)

(568.2)

Short-term contract liabilities

(143.5)

(154.4)

(146.4)

Subtotal

1,609.9

1,498.5

1,447.5

Allowance for doubtful accounts

4.2

3.9

4.2

Inventory reserves

117.2

100.0

80.4

Net managed working capital held for sale

—

—

—

Managed working capital

$             1,731.3

$             1,602.4

$             1,532.1

Annualized prior 3 months sales

$             5,044.5

$             4,606.0

$             4,708.2

Managed working capital as a

% of annualized sales

34.3 %

34.8 %

32.5 %

Change in managed working capital:

  Year-to-date 2026

$               199.2

Q2 2026

$               128.9

SOURCE ATI

In the latest close session, ATI (ATI - Free Report) was up +2.19% at $193.59. The stock outperformed the S&P 500, which registered a daily gain of 0.38%. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, added 0.62%.

The stock of maker of steel and specialty metals has fallen by 3.5% in the past month, lagging the Aerospace sector's loss of 2.35% and the S&P 500's gain of 1.61%.

The investment community will be closely monitoring the performance of ATI in its forthcoming earnings report. The company is scheduled to release its earnings on August 6, 2026. The company is expected to report EPS of $1.03, up 39.19% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $1.22 billion, indicating a 7.3% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.49 per share and a revenue of $5 billion, representing changes of +38.58% and +9.04%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for ATI. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.27% upward. At present, ATI boasts a Zacks Rank of #2 (Buy).

Looking at valuation, ATI is presently trading at a Forward P/E ratio of 42.22. This expresses a premium compared to the average Forward P/E of 36.9 of its industry.

Also, we should mention that ATI has a PEG ratio of 1.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ATI's industry had an average PEG ratio of 2.24 as of yesterday's close.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

Key Takeaways ATI opened a new Chihuahua facility to expand aerospace manufacturing and inspection capacity. The site combines machining, testing, finishing and quality verification to improve throughput. ATI says the expansion supports supply chain resilience and rising aerospace engine demand. ATI Inc. (ATI - Free Report) has expanded its advanced manufacturing and inspection capabilities to meet increasing demand for next-generation aerospace engine components, reinforcing its position as a key supplier to the global aerospace industry. The company’s newly operational facility in Chihuahua, Mexico, enhances critical capacities within ATI’s aerospace forging value chain and is designed to help customers navigate ongoing supply chain challenges affecting aircraft engine production. 

The state-of-the-art greenfield facility combines advanced machining, nondestructive testing, finishing and quality verification technologies in a single location, enabling ATI to more efficiently move critical aerospace components from forging through final inspection while improving throughput and reducing lead times. 

The expansion supports both existing and next-generation aerospace engine programs that require advanced materials and precision manufacturing. ATI is also working closely with customers to accelerate the qualification of critical parts and capabilities to meet rising commercial and defense aerospace demand. 

The new facility also strengthens ATI’s integrated aerospace manufacturing network by providing access to a highly skilled aerospace workforce in Mexico. The investment aligns with the company’s long-term strategy of expanding differentiated manufacturing capabilities in high-growth aerospace and defense markets. 

The project was completed within ATI’s existing capital expenditure framework, demonstrating the company’s focus on disciplined investment while expanding capacity in strategically important areas of its business. 

Per ATI, the investment strengthens a critical segment of the aerospace value chain. As demand for advanced aerospace engines continues to increase, the additional capacity will allow ATI to deliver high-quality products with greater throughput and the differentiated performance customers require. Fields added that the expansion enhances supply chain resilience and supports the aerospace industry’s continued growth. 

Shares of ATI are up 140.5% in the past year compared with the industry’s 18.8% rise. 

Image Source: Zacks Investment Research

ATI’s Zacks Rank & Other Key PicksATI currently carries a Zacks Rank #2 (Buy). 

Other top-ranked stocks in the Aerospace sector include Axon Enterprise, Inc. (AXON - Free Report) , Heico Corporation (HEI - Free Report)  and AAR Corp. (AIR - Free Report) . AXON and HEI carry a Zacks Rank #1 (Strong Buy), while AIR carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for AXON’s current-year earnings stands at $8.09 per share, implying a 18.1% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the average surprise being 8.8%. 

The Zacks Consensus Estimate for HEI’s current-year earnings is pegged at $5.78 per share, implying a 18% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average surprise being 13.8%. 

The Zacks Consensus Estimate for AIR’s current-year earnings is pegged at $4.97 per share, indicating a 27.1% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average surprise being 11.3%.