Specialty materials manufacturer ATI (NYSE: ATI) fell short of the markets revenue expectations in Q4 CY2025, with sales flat year on year at $1.18 billion. Its non-GAAP profit of $0.93 per share was 7.5% above analysts’ consensus estimates.
Is now the time to buy ATI? Find out by accessing our full research report, it’s free.
ATI (ATI) Q4 CY2025 Highlights:
- Revenue: $1.18 billion vs analyst estimates of $1.18 billion (flat year on year, 0.5% miss)
- Adjusted EPS: $0.93 vs analyst estimates of $0.87 (7.5% beat)
- Adjusted EBITDA: $231.9 million vs analyst estimates of $228.6 million (19.7% margin, 1.4% beat)
- Operating Margin: 14.5%, down from 17.8% in the same quarter last year
- Free Cash Flow Margin: 19%, down from 28.4% in the same quarter last year
- Market Capitalization: $16.54 billion
"As we projected, we finished 2025 with strong momentum, exceeding the upper range of our fourth quarter and full-year earnings and cash flow guidance. Demand for ATI's differentiated products and solutions continues to be robust as we support our customers' production ramps and critical missions. I am more confident than ever in ATI's position as an integral part of our customers' supply chains," said Kimberly A. Fields, President and CEO.
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 have short-term success, but a top-tier one grows for years. Over the last five years, ATI grew its sales at a decent 9% compounded annual growth rate. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
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 4.8% over the last two years was below its five-year trend. 
This quarter, ATI’s $1.18 billion of revenue was flat year on year, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 8.7% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and implies its newer products and services will catalyze better top-line performance.
Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend.
Operating Margin
ATI has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.7%.
Analyzing the trend in its profitability, ATI’s operating margin rose by 9.8 percentage points over the last five years, as its sales growth gave it immense operating leverage.
This quarter, ATI generated an operating margin profit margin of 14.5%, down 3.3 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.
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 full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
ATI’s EPS grew at an astounding 19.5% compounded annual growth rate over the last two years, higher than its 4.8% 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. While we mentioned earlier that ATI’s operating margin declined this quarter, a two-year view shows its margin has expandedwhile its share count has shrunk 2.5%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
In Q4, ATI reported adjusted EPS of $0.93, up from $0.79 in the same quarter last year. This print beat analysts’ estimates by 7.5%. Over the next 12 months, Wall Street expects ATI’s full-year EPS of $3.24 to grow 19.3%.
Key Takeaways from ATI’s Q4 Results
It was good to see ATI beat analysts’ EPS expectations this quarter. We were also happy its EBITDA narrowly outperformed Wall Street’s estimates. On the other hand, its revenue slightly missed. Zooming out, we think this was a mixed quarter. The stock traded up 5.1% to $128.02 immediately after reporting.
Should you buy the stock or not? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
