ATI Unveils Acceleration Strategy, Targets Double-Digit Growth and Expanded Margins
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Rhea-AI Summary
ATI (NYSE: ATI) unveiled a growth strategy with new capacity investments and financial targets for 2029 at its Investor Day.
ATI targets 10%–12% compound annual revenue growth from 2026 through 2029 and an adjusted EBITDA margin in the high-20% to low-30% range. Adjusted free cash flow is targeted at approximately $1.25 billion, more than double projected 2026 levels, with conversion greater than 90% of net income. ATI targets returning more than 75% of annual adjusted free cash flow to shareholders over time.
New nickel powder and zirconium sponge expansions are expected to add $200 million and $100 million in revenue, respectively. Nickel powder production is expected to fully ramp in late 2028; zirconium sponge will fully ramp in early 2028. Both fit existing capital expenditure guidance. Together with previously announced nickel remelt/VIM melt and titanium projects, ATI expects nearly $1 billion in incremental revenue when fully online in 2029.
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Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate point. Forward-looking: it has not happened yet and may not happen.Revenue growth target of 10% to 12% compounded annually from 2026 through 2029.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Adjusted EBITDA margin targeted in the high-20% to low-30% range for 2029.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Adjusted free cash flow targeted at approximately $1.25 billion in 2029, more than double projected 2026 levels.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Shareholder returns targeted at more than 75% of annual adjusted free cash flow over time.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Nickel powder expansion expected to add $200 million in revenue, with production fully ramped in late 2028.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Zirconium sponge expansion expected to add $100 million in revenue; full ramp scheduled for early 2028.
6 minor points
- Minor point. Forward-looking: it has not happened yet and may not happen.HPMC margin targeted in the low-to-mid 30% range for 2029.
- Minor point. Forward-looking: it has not happened yet and may not happen.AA&S margin targeted in the mid-to-upper 20% range for 2029.
- Minor point. Forward-looking: it has not happened yet and may not happen.Adjusted free cash flow conversion targeted at greater than 90% of net income for 2029.
- Minor point. Forward-looking: it has not happened yet and may not happen.Managed working capital targeted at below 30% of sales for 2029.
- Minor pointBoth new capacity investments are included in existing capital expenditure guidance.
- Minor pointATI says it delivered its 2027 targets a year early.
Negative
- None.
News Explained
ATI’s 2029 adjusted EBITDA and adjusted free-cash-flow targets are forward-looking non-GAAP measures; ATI says reconciliations to comparable GAAP measures are unavailable without unreasonable effort because of the complexity of excluded components.
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Announces investments in high-demand nickel powder and zirconium sponge to expand differentiated capability
The strategy builds on ATI's differentiated capabilities in aerospace, defense and specialty energy, focusing investment where customer demand is strong and ATI's materials and manufacturing expertise create the greatest value.
"ATI has transformed into a stronger, focused aerospace and defense leader with differentiated capabilities and a strong foundation for growth," said Kimberly A. Fields, Board Chair, President and CEO. "We delivered on our 2027 targets a year early. Now, we're accelerating – extending our differentiated lead, growing in attractive markets, and converting demand into stronger earnings and cash flow."
2029 Targets
ATI introduced the following targets for 2029:
- Revenue Compound Annual Growth Rate of
10% to12% from 2026 through 2029. - Adjusted EBITDA(a) margin in the high
-20% to low-30% range.- HPMC margin in the low-to-mid
30% range. - AA&S margin in the mid-to-upper
20% range.
- HPMC margin in the low-to-mid
- Adjusted free cash flow(a) of approximately
$1.25 billion - Adjusted free cash flow(a) conversion greater than
90% of net income. - Managed working capital(b) below
30% of sales.
ATI targets returning more than
Expanding Differentiated Capacity
ATI also announced investments to increase nickel powder capacity and expand zirconium sponge production. Together with previously announced projects for nickel remelt/ VIM melt and titanium, these investments are expected to support nearly
- Nickel powder – Bakers, NC: Increasing production capacity of the Bakers powder facility to create the most advanced nickel superalloys used in next-generation jet engines and other high-temperature applications. The project includes an atomizer and product processing. Production is expected to be fully ramped in late 2028. The project is expected to drive incremental revenue of
$200 million - Zirconium sponge – Millersburg, OR: Increasing high-purity zirconium production. The zirconium sponge expansion extends ATI's capabilities in converting chemical products to nuclear-grade materials to support growing demand for commercial and naval nuclear energy applications. The brownfield expansion will be fully ramped in early 2028. The project is expected to drive incremental revenue of
$100 million
Both investments are included in the company's existing capital expenditure guidance.
"The opportunities to extend ATI's lead and accelerate growth reach well beyond 2029," said Fields. "We are focused on executing with discipline: bringing differentiated capacity online, meeting customer needs and delivering on our commitments."
Investor Day Materials
ATI's Investor Day presentation and related materials are available on the company's investor relations website at ATImaterials.com. A webcast video replay will also be available.
(a) Detailed reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are not available without unreasonable effort due to the complexity of the excluded components.
(b) We define managed working capital as gross accounts receivable, short-term contract assets and gross inventories, less accounts payable and short-term contract liabilities.
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this news release relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements, which may contain such words as "anticipates," "believes," "estimates," "expects," "would," "should," "will," "will likely result," "forecast," "outlook," "projects," and similar expressions, are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control. Our performance or achievements may differ materially from those expressed or implied in any forward-looking statements due to the following factors, among others: (a) material adverse changes in economic or industry conditions generally, including global supply and demand conditions and prices for our specialty materials; (b) material adverse changes in the markets we serve; (c) our inability to achieve the level of cost savings, productivity improvements, synergies, growth or other benefits anticipated by management from strategic investments and the integration of acquired businesses; (d) volatility in the price and availability of the raw materials that are critical to the manufacture of our products; (e) declines in the value of our defined benefit pension plan assets or unfavorable changes in laws or regulations that govern pension plan funding; (f) labor disputes or work stoppages; (g) equipment outages; (h) business and economic disruptions associated with extraordinary events beyond our control, such as war, terrorism, international conflicts, public health issues, such as epidemics or pandemics, natural disasters and climate-related events that may arise in the future and (i) other risk factors summarized in our Annual Report on Form 10-K for the year ended December 28, 2025, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements.
ATI: Proven to Perform.
ATI (NYSE: ATI) is a global producer of high performance materials and solutions for the aerospace, defense and specialty energy markets. We're solving the world's most difficult challenges through materials science. We partner with our customers to deliver extraordinary materials that enable their greatest achievements: their products fly higher and faster, burn hotter, dive deeper, stand stronger and last longer. Our proprietary process technologies, unique customer partnerships and commitment to innovation deliver materials and solutions for today and the evermore challenging environments of tomorrow. We are proven to perform anywhere. Learn more at ATImaterials.com.
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SOURCE ATI
FAQ
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What are ATI's 2029 revenue and cash flow targets?
ATI targets 10% to 12% compound annual revenue growth from 2026 through 2029 and approximately $1.25 billion in adjusted free cash flow in 2029. The cash flow target is more than double projected 2026 levels, with conversion targeted at greater than 90% of net income.
When will ATI's nickel powder and zirconium sponge expansions ramp up?
The nickel powder expansion is expected to be fully ramped in late 2028, while the zirconium sponge expansion will be fully ramped in early 2028. The projects are expected to drive incremental revenue of $200 million and $100 million, respectively, and both are included in existing capital expenditure guidance.
How does ATI define managed working capital for its 2029 target?
ATI defines managed working capital as gross accounts receivable, short-term contract assets and gross inventories, less accounts payable and short-term contract liabilities. Its 2029 target is below 30% of sales.