ATI Inc. 2025-26: Aerospace 68%, FY26 EBITDA $1B, EPS $4 Range
FY25 revenue $4.59B (+5%); op income $641M (+5%); NI $404M (+10%); EPS $2.85 (+12%). Adj EBITDA >$859M FY25 (+18%). Q4 adj EBITDA $232M (margin 19.7%, above guidance). Adj EPS $3.24 FY25 (+32%). Adj FCF $380M FY25 (+53%). Aerospace + Defense 68% of FY revenue (vs 62% FY24); A&D +14% YoY FY25; jet engine sales +21% FY25. Specialty Energy +9% YoY Q4. ATI now producing 6 of the 7 most advanced jet engine nickel alloys (long-term agreements). FY26 guide: adj EBITDA $975M-$1.025B (midpoint $1B / +16% YoY); adj FCF $430M-$490M (midpoint $460M / +21%); adj EPS $3.99-$4.27; gross capex $280M-$300M / net capex $220M-$240M.
Key takeaways
- Aerospace + Defense 68% of revenue (vs 62% FY24) — structural mix shift. Jet engine sales +21% FY25; A&D segment +14% YoY full-year. Commercial aerospace cycle (Boeing 737 MAX recovery + Airbus A320/A350 ramp + engine OEM dynamics) + defense build cycle drive both volume + premium pricing. The mix shift toward A&D = higher margin economics + more specialty alloy content.
- 6 of 7 most advanced jet engine nickel alloys. ATI is positioned in 6 of the 7 cutting-edge nickel alloys for next-generation jet engines (LEAP, GTF, RR Trent UltraFan, GE9X, others). Long-term agreements lock in volume + economics for multi-year horizon. Strategic moat in specialty metallurgy.
- FY26 adj EBITDA $1B midpoint (+16% YoY) + adj EPS $3.99-$4.27. Adjusted EPS midpoint $4.13 = +27% from $3.24 FY25 base. Combined with adj FCF $460M (+21%) and capex discipline = strong forward financial profile.
- Adj FCF $380M FY25 (+53%) + FY26 $430M-$490M. Cash flow inflection accelerating. Capital efficiency improving as A&D mix + capacity utilization scale. Net capex $220-$240M FY26 (gross $280-$300M, partially customer-funded) reflects disciplined capacity investment.
- Specialty Energy +9% YoY Q4. Power generation demand accelerating (data center load + grid build-out). ATI's specialty stainless + nickel + cobalt alloys for power generation turbines + transformers + nuclear applications benefit.
Business
ATI Inc. is a US specialty metals manufacturer producing premium high-performance alloys (nickel, cobalt, titanium, specialty stainless) for aerospace + defense, energy, medical, and industrial customers. Mirror-image business model to Carpenter Technology — different product mix + customer relationships:
- High Performance Materials & Components (HPMC) (~75% of revenue / ~85% of EBITDA). Premium nickel + cobalt + titanium + zirconium specialty alloys. Forging + extrusion + investment castings. Dominant in jet engine nickel alloys (6 of 7 most advanced) — multi-year LTA contracts. Customer base: GE Aerospace (CFM/LEAP), Pratt & Whitney (GTF), Rolls-Royce (Trent + UltraFan), aerospace primes, defense.
- Advanced Alloys & Solutions (AA&S) (~25% of revenue). Specialty stainless + advanced engineered components. Customer base: medical (specialty stainless implant + device alloys), energy (specialty stainless for power generation + nuclear), industrial.
Strategic moves FY25:
- A&D segment +14% YoY revenue / 68% of FY (vs 62% FY24)
- Jet engine sales +21% FY25
- 6 of 7 most advanced jet engine nickel alloys positioned
- Long-term agreements (LTAs) supporting volume + pricing
- Specialty Energy +9% YoY Q4
- Adj EBITDA margin Q4 19.7% (above guidance)
- Adj FCF $380M FY25 (+53%)
- $400M+ buyback program / $470M FY25 actual (vs $286M FY24)
- Capital discipline + brownfield expansion
- Investments in proprietary engine alloys + high-return opportunities
- ATI EBITDA outperformance + cash flow + share repurchase
FY25 financial performance
| Metric (FY) | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue ($B) | 3.84 | 4.17 | 4.36 | 4.59 |
| Revenue YoY | n/a | +9% | +5% | +5% |
| Op income ($M) | 316 | 466 | 609 | 641 |
| Op margin | 8.2% | 11.2% | 14.0% | 14.0% |
| Net income ($M) | 324 | 411 | 368 | 404 |
| Diluted EPS ($) | 2.23 | 2.81 | 2.55 | 2.85 |
| Adj EPS ($) | n/a | n/a | $2.46 | $3.24 |
| Adj EBITDA ($M) | n/a | n/a | $730 | $859 |
| FCF ($M) | 94 | -115 | 168 | 334 |
| Capex ($M) | -131 | -201 | -239 | -281 |
| Total debt ($B) | 1.75 | 2.18 | 1.90 | 1.95 |
| Buyback ($M) | -146 | -96 | -286 | -470 |
The earnings progression: revenue 4-yr CAGR ~6%; op margin 8.2% (FY22) → 14.0% (FY25), +580bp expansion. Adj EBITDA $730M (FY24) → $859M (FY25, +18%). Adj EPS $2.46 → $3.24 (+32%). FCF $334M FY25 (+99% YoY). The structural margin transformation is the central thesis.
Total debt $1.95B (basically flat YoY) — disciplined balance sheet. Buyback $-470M FY25 (+64% YoY) reflects capital return discipline + cash flow strength.
Capital allocation
- Capex $-281M FY25 (+18% YoY). FY26 plan: gross $280M-$300M / net $220M-$240M (customer funding partial offset). Brownfield + capacity expansion.
- Dividends $-13M FY25 (modest absolute).
- Buybacks $-470M FY25 (+64% YoY); $400M+ program with continued execution.
- Debt $1.95B (flat).
- FCF $334M (+99% GAAP); adj FCF $380M (+53%).
FY26 outlook (per Q4 2025 call, 2026-02-03)
| FY26 framework | Detail |
|---|---|
| Adj EBITDA | $975M to $1.025B (+16% midpoint) |
| Adj EBITDA growth | $1B at midpoint |
| Adj FCF | $430M to $490M (+21% midpoint) |
| Adj EPS | $3.99 to $4.27 |
| Q1 adj EBITDA | Reflects seasonality (lower) |
| Gross capex | $280M to $300M |
| Net capex | $220M to $240M (after customer funding) |
| A&D revenue continued | Strong + accelerating |
| Energy + Power generation | Accelerating |
The +16% adj EBITDA growth + +21% adj FCF growth + adj EPS $4 range = strong forward setup. Q1 seasonally low; full-year ramp pattern.
Key risks
Aerospace cycle dependencies. A&D 68% of revenue. Commercial aerospace cycle (Boeing 737 MAX recovery, Airbus A320 + A350 ramp, engine OEM production cadence) + defense spending all matter. CFM LEAP + GTF + Trent + UltraFan production schedules drive specialty alloy demand. Engine OEM reliability issues (PW GTF, CFM LEAP MTBR) affect aftermarket vs new build mix.
Customer concentration. Top customers (GE Aerospace, Pratt & Whitney, Rolls-Royce, Boeing, Airbus, defense primes) drive significant revenue. Customer-level decisions affect quarterly results.
LTA pricing dynamics. Long-term agreements lock in pricing — but commodity input costs (nickel, cobalt) volatility creates margin compression risk if surcharge mechanisms don't fully pass through.
Defense budget volatility. Defense customer demand depends on US defense budget priorities + foreign military sales + export approvals.
Capacity expansion ROI. Brownfield capex stepping up. Multi-year payback dependent on volume + utilization + product mix.
Specialty stainless competition. Carpenter Technology (CRS), Allegheny Technologies (own subsidiary previously), Haynes, Special Metals, Western Forge — competitive specialty metals landscape.
Energy / power generation cycle. Specialty Energy +9% Q4 — cycle dependent on utility capex, data center load, power generation buildout. Currently strong.
Medical demand recovery. Medical AA&S segment recovering — uncertain timing.
FX volatility. Multi-currency operations.
Operating leverage at peak. Op margin 14%+ — sustainability requires continued utilization + mix.
Capital allocation balance. Buyback + capex + selective M&A — needs ongoing balance.
Geopolitical / trade. Specialty metals + aerospace supply chain affected by trade policy + export controls + sanctions.
Bottom line
ATI Inc. FY25 is the structural compounding + A&D mix shift year: revenue +5% to $4.59B, op income +5%, adj EBITDA +18% to $859M, adj EPS +32% to $3.24, adj FCF +53% to $380M, A&D 68% of revenue (vs 62% FY24), jet engine sales +21%. The 6-of-7 advanced engine nickel alloy position + long-term agreements + Specialty Energy acceleration + Medical recovery = multi-segment strength.
FY26 guide of adj EBITDA $1B midpoint (+16%) + adj FCF $460M (+21%) + adj EPS $4 range + capex $280-$300M gross / $220-$240M net = strong forward financial profile. Q1 seasonally low + full-year ramp typical pattern.
The risks are real — aerospace cycle, customer concentration, LTA pricing, defense budget, capacity expansion ROI, specialty stainless competition, energy / power generation cycle, medical recovery, FX, operating leverage at peak, capital allocation balance, geopolitical / trade.
But the structural thesis (premium specialty alloys for aerospace + defense + energy + medical + industrial + 6-of-7 advanced engine alloys + long-term agreements + structural margin expansion + multi-year demand cycle + capacity expansion + capital return) is intact and FY25 print confirms.
Quality specialty metals compounder mid-aerospace + defense + energy + medical demand cycle. The A&D mix shift (+6pp YoY) + jet engine sales +21% + Specialty Energy +9% + adj EBITDA $1B FY26 + adj EPS $4 range creates an exceptional mid-cap industrial compounding setup. Investors get exposure to commercial aerospace cycle + defense build + power generation capex + medical recovery + specialty alloy content per platform + long-term agreements + capital return discipline. The conservative FY26 guide framework + Q1 starting point + mix shift dynamics + capacity discipline provides multiple paths to outperformance.
Citations
- ATI Inc. FY25 Form 10-K (filed February 2026, SEC EDGAR).
- ATI Q4 2025 earnings call, 2026-02-03 — FY revenue $4.6B (+5%); A&D 68% of FY revenue (vs 62% FY24); A&D +14% YoY; jet engine sales +21%; Q4 adj EBITDA $232M (margin 19.7% above guidance); FY adj EBITDA >$859M (+18%); FY adj EPS $3.24 (+32%); FY adj FCF $380M (+53%); 6 of 7 advanced jet engine nickel alloys positioned; Specialty Energy Q4 +9%; FY26 guide (adj EBITDA $975M-$1.025B; adj FCF $430M-$490M; adj EPS $3.99-$4.27; gross capex $280M-$300M / net $220M-$240M).
- ATI Q3 2025 / Q2 2025 / Q1 2025 earnings calls — supporting HPMC + AA&S segment dynamics + market verticals (assumed in line with Q4 trajectory).
- Internal financial_statements view (consolidated annual + cash flow + capital structure).