Second Quarter 2026
Filed Aug 6, 2026ATI Announces Second Quarter 2026 Results; ATI Exceeds the High End of Q2 Guidance and Raises Full-Year Outlook
Sales grew 11% year-over-year, GAAP diluted EPS rose 56%, adjusted EBITDA increased 37%, and adjusted EBITDA margin expanded to 22.6%. Both operating segments grew sales year-over-year, AA&S delivered substantial margin expansion, backlog reached a record $4.4 billion, and ATI raised full-year adjusted EBITDA, adjusted EPS, and adjusted free-cash-flow guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| SalesGAAP | $1,261.1 million | 10 % | 11 % |
| Net income attributable to ATIGAAP | $151.0 million | 28 % | 50 % |
| Earnings per shareGAAP | $1.09 | 28 % | 56 % |
| Adjusted net income attributable to ATInon-GAAP | $169.7 million | 22 % | 59 % |
| Adjusted earnings per sharenon-GAAP | $1.23 | 23 % | 66 % |
| ATI adjusted EBITDAnon-GAAP | $284.4 million | 23 % | 37 % |
| Adjusted EBITDA as a percentage of salesnon-GAAP | 22.6% | – | 440 basis points |
| HPMC segment EBITDAnon-GAAP | $153.5 million | – | – |
| HPMC segment EBITDA as a percentage of salesnon-GAAP | 24.1 % | – | – |
| AA&S segment EBITDAnon-GAAP | $147.6 million | – | – |
| AA&S segment EBITDA as a percentage of salesnon-GAAP | 23.7 % | – | – |
| Corporate expensesother | $14.9 million | – | – |
| Closed operations and other income/expenseother | expense of $1.8 million | – | – |
| Effective tax rateGAAP | 20.0% | – | – |
| Restructuring and other chargesother | $23.6 million | – | – |
| Cash provided by operating activitiesGAAP | $131.8 million | – | – |
| Capital expendituresother | $68.6 million | – | – |
| Managed working capital as a percent of annualized salesother | 34.3% | decrease of 50 basis points | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| High Performance Materials & Components (HPMC)Sequential growth was primarily due to strong demand and pricing for commercial jet engine products. Year-over-year growth was primarily driven by a 10% increase in commercial jet engine sales due to strong demand and pricing. | $637.1 million | 4% | 5% |
| Advanced Alloys & Solutions (AA&S)Sequential growth was primarily due to higher aerospace & defense and conventional energy sales. Year-over-year growth was primarily due to higher sales to aerospace & defense and conventional energy markets. | $624.0 million | 16% | 17% |
Q3 2026 and Full Year 2026 outlook
- NoteQ3 2026 adjusted EBITDA (non-GAAP): $305M - $315M
- NoteFull Year 2026 adjusted EBITDA (non-GAAP): $1,135M - $1,185M
- NoteFull Year 2026 prior adjusted EBITDA guidance (non-GAAP): $1,010M - $1,060M
- NoteQ3 2026 adjusted earnings per share (non-GAAP): $1.31 - $1.37
- NoteFull Year 2026 adjusted earnings per share (non-GAAP): $4.90 - $5.18
- NoteFull Year 2026 prior adjusted earnings per share guidance (non-GAAP): $4.20 - $4.48
- NoteFull Year 2026 adjusted free cash flow (non-GAAP): $550M - $600M
- NoteFull Year 2026 prior adjusted free cash flow guidance (non-GAAP): $465M - $525M
Capital returns
- The Company repurchased $50 million of its common stock at an average price per share of $159.53, retiring approximately 0.3 million shares.
- Total share repurchase authorization remaining was $495 million as of the end of second quarter 2026.
What drove it
- Aerospace & defense sales increased 13% year-over-year.
- HPMC aerospace & defense sales represented 93% of total HPMC sales in second quarter 2026, unchanged from first quarter 2026.
- AA&S aerospace & defense sales increased 19% sequentially and represented 44% of total AA&S sales in the second quarter of 2026.
- AA&S aerospace & defense sales grew by 34% year-over-year, including a 90% increase in defense sales.
- AA&S margin expansion was driven by higher pricing and favorable mix, inclusive of a $9.9 million gain from the sale of a previously closed manufacturing facility.
- The full-year outlook is supported by contracted pricing improvements, a richer product mix, and increasing production volumes as targeted investments and operational execution expand available capacity.
Concerns
- HPMC sequential segment EBITDA margin declined primarily because of higher manufacturing and period costs, including costs associated with revised qualification requirements for the new facility in Mexico and titanium electron-beam furnace.
- Second quarter 2026 GAAP and non-GAAP results included 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 adjusted results excluded pre-tax charges of $23.6 million for special items.
- The second quarter 2026 effective tax rate of 20.0% was higher than 11.8% in first quarter 2026, primarily due to the timing and amount of discrete tax benefits, mostly for share-based compensation.
What to watch
- Q3 2026 adjusted EBITDA guidance of $305M - $315M.
- Execution on higher production volumes and capacity expansion from targeted investments.
- HPMC manufacturing and period costs associated with revised qualification requirements for the new facility in Mexico and titanium electron-beam furnace.
- Continuation of aerospace, defense, commercial jet engine, conventional energy, pricing, and mix momentum.
- Conversion of the record $4.4 billion backlog and the guided full-year adjusted free cash flow of $550M - $600M.
Balance sheet and cash flow
- Cash provided by operating activities was $131.8 million for second quarter 2026.
- 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.
- Backlog reached another record at $4.4 billion, up 18% year-over-year.
Analysis
ATI reported a strong second quarter, with GAAP sales of $1,261.1 million, up 11% year-over-year and 10% sequentially. Net income attributable to ATI rose 50% year-over-year to $151.0 million, while GAAP EPS increased 56% to $1.09. On a non-GAAP basis, adjusted EBITDA increased 37% year-over-year to $284.4 million and adjusted EBITDA as a percentage of sales reached 22.6%, compared with 18.2% in second quarter 2025.
Both businesses expanded sales. HPMC revenue was $637.1 million, rising 4% sequentially and 5% year-over-year on commercial jet engine demand and pricing. HPMC aerospace & defense sales represented 93% of segment sales. AA&S revenue was $624.0 million, up 16% sequentially and 17% year-over-year, supported by aerospace & defense and conventional energy. AA&S aerospace & defense sales increased 34% year-over-year, including a 90% increase in defense sales.
Mix and pricing supported profitability, particularly at AA&S, where segment EBITDA margin was 23.7 %, versus 18.1 % in first quarter 2026 and 14.4 % in second quarter 2025. That result included a $9.9 million gain from the sale of a previously closed manufacturing facility. HPMC segment EBITDA margin was 24.1 %, below 24.9 % in the first quarter, as higher manufacturing and period costs related in part to revised qualification requirements for the Mexico facility and titanium electron-beam furnace more than offset the benefits of volume and pricing.
Cash provided by operating activities was $131.8 million and capital expenditures were $68.6 million. Managed working capital as a percent of annualized sales was 34.3%, down 50 basis points from the first quarter. ATI repurchased $50 million of common stock and retained $495 million of repurchase authorization. Backlog reached a record $4.4 billion, up 18% year-over-year, providing a reported indicator of demand relative to available supply.
ATI raised full-year 2026 guidance for adjusted EBITDA to $1,135M - $1,185M, adjusted EPS to $4.90 - $5.18, and adjusted free cash flow to $550M - $600M. The company attributed the outlook to contracted pricing improvements, richer product mix, and increasing production volumes as investments and operational execution expand capacity. Investors should track Q3 adjusted EBITDA guidance of $305M - $315M, HPMC qualification-related costs, the durability of AA&S margin gains excluding the facility-sale gain, and cash-flow conversion against the full-year adjusted free-cash-flow target.
Management, verbatim
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.
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.
Kimberly A. Fields, Board Chair, President and CEO
Momentum is carrying into the second half, and we are again raising our full-year guidance for adjusted earnings, EBITDA and free cash flow.
Kimberly A. Fields, Board Chair, President and CEO
Not in the filing
stated, not guessed- Period-end date
- GAAP gross profit and gross margin
- GAAP operating income and operating margin
- GAAP free cash flow
- Actual adjusted free cash flow
- Cash balance
- Debt balance
- Dividend amount or dividend declaration
- Q3 2026 revenue guidance
- Q3 2026 gross-margin guidance
- Q3 2026 operating-expense guidance
- Q3 2026 tax-rate guidance
- Full Year 2026 revenue guidance
- Full Year 2026 gross-margin guidance
- Full Year 2026 operating-expense guidance
- Full Year 2026 tax-rate guidance
- Prior-release outlook for comparison with actual second-quarter results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.