ATI Inc. Reports 9.7% Sales Increase to $1.144 Billion in Q1 2025

ATI Inc. reported a significant increase in financial performance for the first quarter of 2025, with total sales reaching $1.144 billion, a 9.7% rise from $1.043 billion in the same period last year. The company's gross profit also improved, totaling $235.8 million, or 20.6% of sales, compared to $197.4 million, or 18.9% of sales, in the prior year. Net income attributable to ATI was $97.0 million, translating to $0.67 per diluted share, up from $66.1 million, or $0.46 per diluted share, in the first quarter of 2024. The increase in profitability was attributed to higher sales in the aerospace and defense sectors, which accounted for 66% of total sales.

Compared to the previous fiscal period, ATI's financials showed marked improvement. The operating income rose to $146.9 million from $115.2 million year-over-year, while the effective tax rate decreased to 17.3% from 19.8%. The company also reported a decrease in interest expenses, which fell to $23.0 million from $26.6 million, primarily due to the redemption of convertible notes in the previous year. Additionally, the company maintained a backlog of confirmed orders totaling $4.0 billion, indicating strong future revenue potential.

Strategically, ATI completed the sale of non-core operations in Birmingham, UK, and Dusseldorf, Germany, resulting in a loss of $3.7 million, which was excluded from segment results. The company continues to focus on its core business segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). The HPMC segment saw sales of $584.1 million, a 10% increase, while the AA&S segment reported $560.3 million, a 9% increase. The company is also actively managing its capital structure, with a share repurchase program that has utilized $180 million of the $700 million authorized.

Operationally, ATI's workforce consisted of approximately 7,800 employees, with about 10% located outside the United States. The company reported an increase in managed working capital as a percentage of annualized sales to 35.9%, up from 30.9% at the end of 2024, primarily due to seasonal inventory builds. Days sales outstanding worsened by 21%, reflecting challenges in collection timing, while gross inventory turns decreased by 4%. The company is closely monitoring these metrics to optimize cash flow and operational efficiency.

Looking ahead, ATI's management expressed confidence in the company's growth trajectory, supported by a strong backlog and long-term agreements with aerospace market original equipment manufacturers (OEMs). However, they acknowledged potential macroeconomic risks and uncertainties that could impact performance. The company remains committed to enhancing its operational capabilities and addressing market challenges to sustain profitability and growth in the coming quarters.