ATI's (NYSE:ATI) Q3 CY2025 Earnings Results: Revenue In Line With Expectations

Specialty materials manufacturer ATI (NYSE:ATI) met Wall Streets revenue expectations in Q3 CY2025, with sales up 7.1% year on year to $1.13 billion. Its non-GAAP profit of $0.85 per share was 15.2% above analysts’ consensus estimates.

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Company Overview

With its materials flying in nearly every commercial and military aircraft in service today, ATI (NYSE:ATI) produces highly specialized materials and components for aerospace, defense, medical, and energy applications using advanced metallurgy and manufacturing processes.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, ATI’s 6.5% annualized revenue growth over the last five years was mediocre. This wasn’t a great result compared to the rest of the industrials sector, but there are still things to like about ATI.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. ATI’s recent performance shows its demand has slowed as its annualized revenue growth of 5.5% over the last two years was below its five-year trend.

This quarter, ATI grew its revenue by 7.1% year on year, and its $1.13 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.7% over the next 12 months, similar to its two-year rate. This projection is underwhelming and indicates its newer products and services will not lead to better top-line performance yet. At least the company is tracking well in other measures of financial health.

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Operating Margin

ATI was profitable over the last five years but held back by its large cost base. Its average operating margin of 4.5% was weak for an industrials business.

On the plus side, ATI’s operating margin rose by 53.4 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q3, ATI generated an operating margin profit margin of 14.4%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

ATI’s EPS grew at an astounding 80.9% compounded annual growth rate over the last five years, higher than its 6.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of ATI’s earnings can give us a better understanding of its performance. As we mentioned earlier, ATI’s operating margin was flat this quarter but expanded by 53.4 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For ATI, its two-year annual EPS growth of 19.8% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q3, ATI reported adjusted EPS of $0.85, up from $0.60 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects ATI’s full-year EPS of $3.10 to grow 17.5%.

Key Takeaways from ATI’s Q3 Results

We were impressed by how significantly ATI blew past analysts’ EBITDA expectations this quarter. We were also glad its adjusted operating income outperformed Wall Street’s estimates. On the other hand, its revenue missed and its revenue fell short of Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $116.75 immediately after reporting.

ATI may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.