ATI (ATI) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales rose 10% year-over-year to $1.14 billion, with adjusted EBITDA up 29% to $195 million and adjusted EPS of $0.72, both exceeding guidance.

• Aerospace & defense accounted for 66% of revenue, with commercial jet engine sales up 35% and defense up 11%, offsetting softness in other markets.

• Net income attributable to ATI was $97 million, a 47% increase year-over-year; gross profit margin improved to 20.6%.

• A new six-year labor agreement was ratified, ensuring operational stability for nearly 1,000 employees.

• The GICS code was reclassified to Aerospace and Defense, reflecting strategic transformation.

Financial highlights

• Q1 2025 revenue reached $1.144 billion, up 10% year-over-year; adjusted EBITDA margin was 17%.

• Net income was $97 million, with adjusted EPS of $0.72, up over 50% year-over-year.

• Gross profit was $235.8 million (20.6% margin), up from $197.4 million (18.9%) a year ago.

• Cash and cash equivalents at quarter-end were $475.8 million; cash used in operations was $92.5 million due to higher receivables and inventory.

• Share repurchases totaled $70 million in Q1, with up to $250 million planned for Q2.

Outlook and guidance

• Q2 2025 adjusted EBITDA guidance is $195–$205 million; adjusted EPS guidance is $0.67–$0.73.

• Full-year 2025 guidance: adjusted EBITDA $800–$840 million, adjusted EPS $2.87–$3.09, free cash flow $240–$360 million, and capex $260–$280 million.

• Jet engine sales expected to grow 15–20% over 2024; defense sales to grow upper single digits.

• Guidance assumes $250 million in share repurchases in Q2 2025.

• Margin expansion anticipated through improved sales mix and operating performance, despite macroeconomic risks.