ATI INC Q1 FY2025 earnings call

• Q1 was an excellent start, with revenues up 10% YOY, adjusted EBITDA surpassing guidance. • Strong demand in aerospace and defense markets, with A&D representing 66% of revenue. • Ratified a six-year labor agreement in AA&S segment for labor stability. • Reclassified to aerospace and defense GICS code. • Invested in press, forging, and downstream assets, leading to higher output and customer value. • Defense sales grew 11% YOY in Q1, and airframe business is growing with strong titanium capabilities.

Revenues grew 10% year-over-year to exceed $1.1 billion for the quarter. Adjusted EBITDA reached $195 million. HPMC segment had margins of 22.4%, and AA&S segment had margins of nearly 15%. A&D represented 66% of total Q1 revenue. Revenues in Q1 were approximately $1.14 billion, up 10% YOY.

• Maintained full year 2025 adjusted EBITDA guidance of $800 million to $840 million. • Increased full year EPS guidance to $2.87 to $3.09 per share. • Q2 adjusted EBITDA guidance set at $195 million to $205 million, equating to EPS range of $0.67 to $0.73 per share. • Anticipated Q2 to be similar to Q1 with ramp and recovery expected later in the year.

• Trade related uncertainty affecting industrial markets. • Macro-economic conditions that could impact demand in non-A&D markets. • Volatility in tariff and trade landscape posing potential challenges.

Q: Can you provide more color on aftermarket or MRO contribution to A&D growth this quarter?

A: Kim Fields mentioned strong MRO demand, with MRO running 40%-50%, and Don Newman added that MRO is a strength in jet engine sales growth.

Q: What's the impact of the U.S. and Ukraine mineral deal on ATI's sourcing of feedstock?

A: Kim Fields said it could positively impact titanium sponge supply chain in the long term, though not immediate.

Q: Talk more about pricing. How much of pricing impacted 1Q results?

A: Don Newman said HPMC saw price increases in titanium and nickel, 6%-7% YOY, with long-term agreements capturing these increases.

Q: Does the reiterated guide include contingency for softer sales in other industrial end markets?

A: Don Newman said the guide includes risk for softer sales in industrial markets.

Q: Details on nickel alloy capital spending and capacity?

A: Don Newman discussed nickel alloy investments similar to titanium, focusing on melt and production capabilities to meet jet engine demand.

Q: Progression on wide-bodies and Airbus contract?

A: Kim Fields said Boeing is ramping, new titanium capacity online, and Airbus five-year $1 billion contract is largely for titanium.