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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-04-30 · 239 added, 109 removed, 208 unchanged (63% of the section changed)

1 unchanged sentence

ATI produces specialty materials, highly differentiated by our materials science expertise and advanced process technologies.

Aerospace & defense, our largest end markets, represented 69% of sale s for the quarter ended March 29, 2026, led by products for jet engines and airframes in addition to a wide range of defense applications.

Aerospace & defense, our largest end markets, represented 69% of sales for the year-to-date period ended June 28, 2026, led by products for jet engines and airframes in addition to a wide range of defense applications.

Additionally, we have a strong presence in the specialty energy market and serve customers in several other markets including conventional energy, medical, electronics and other industrial markets.

We operate in two business segments:

High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions

High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S).

HPMC produces a wide range of high performance materials, components, and advanced metallic powder alloys.

These products are made from nickel-based alloys and superalloys, titanium and titanium-based alloys, and a variety of other

specialty materials.

HPMC’s capabilities range from cast/wrought and powder alloy development to production of highly

engineered finished components, and 3D-printed aerospace products.

The HPMC segment’s primary focus is on maximizing jet

engine materials and components growth, with approximately 93% of its revenue derived from the aerospace & defense

markets, including approximately 70% from products for commercial jet engines.

The AA&S segment produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys, including

zirconium, hafnium, and niobium, in a variety of forms including plate, sheet, and strip products.

AA&S focuses on high-value

materials that are utilized in technically challenging and extreme environments, which require materials that can withstand

extreme heat, radiation and corrosion.

Sales to the aerospace & defense markets comprises approximately 43% of total AA&S

AA&S also serves customers across several other markets, notably specialty energy and conventional energy, as

well as electronics and certain industrial markets.

These products are made from nickel-based alloys and superalloys, titanium and titanium-based alloys, and a variety of other specialty materials.

HPMC’s capabilities range from cast/wrought and powder alloy development to production of highly engineered finished components, and 3D-printed aerospace products.

The HPMC segment’s primary focus is on maximizing jet engine materials and components growth, with approximately 93% of its revenue derived from the aerospace & defense markets, including approximately 71% from products for commercial jet engines.

The AA&S segment produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys, including zirconium, hafnium, and niobium, in a variety of forms including plate, sheet, and strip products.

AA&S focuses on high-value materials that are utilized in technically challenging and extreme environments, which require materials that can withstand extreme heat, radiation and corrosion.

Sales to the aerospace & defense markets comprise approximately 43% of total AA&S sales.

AA&S also serves customers across several other markets, notably specialty energy and conventional energy, as well as electronics and certain industrial markets.

ATI follows a 4-4-5 or 5-4-4 fiscal calendar, whereby each fiscal quarter consists of thirteen weeks grouped into two four-week months and one five-week month, and its fiscal year ends on the Sunday closest to December 31.

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Results of Operations

First quarter 2026 sales increased approximately 1% to $1.15 billion, compared to $1.14 billion of sales for the first quarter 2025, primarily due to increased demand and favorable pricing in the aerospace & defense markets, partially offset by a net decline in sales to our other markets, mostly in the conventional energy market.

In aggregate, ATI’s aerospace & defense sales increased 6% to $797.6 million, or 69% of total sales in the first quarter 2026, compared to $754.4 million, or 66% of total sales in the first quarter 2025.

The increase in aerospace & defense sales was driven by commercial jet engine and defense products, partially offset by a decline in sales of commercial airframe products.

Comparative information regarding our overall sales (in millions) by end market and their respective percentages of total sales for the quarterly periods ended March 29, 2026 and March 30, 2025 is shown below.

Quarter ended Quarter ended

Markets March 29, 2026 March 30, 2025

Second quarter 2026 sales increased approximately 11% to $1.26 billion, compared to $1.14 billion of sales for the second quarter 2025, primarily due to higher pricing and strong demand in the aerospace & defense markets, particularly for commercial jet engine and naval nuclear defense products.

In aggregate, ATI’s aerospace & defense sales increased 13% to $862.0 million, or 68% of total sales in the second quarter 2026, compared to $761.8 million, or 67% of total sales in the second quarter 2025.

Also, sales to other markets increased $21 million in the second quarter 2026 compared to the second quarter 2025, primarily due to increases in various industrial markets, including conventional energy and automotive.

Sales for the year-to-date period ended June 28, 2026 increased approximately 6% to $2.41 billion, compared to $2.28 billion of sales for the year-to-date period ended June 29, 2025, primarily due to increased demand and favorable pricing in the aerospace & defense markets.

On a year-to-date basis, commercial jet engine and defense sales increased 13% and 22%, respectively.

In aggregate, ATI's aerospace & defense sales increased 10% to 1.66 billion, or 69% of total sales in the year-to-date period ended June 28, 2026, compared to 1.52 billion, or 66% of total sales in the year-to-date period ended June 29, 2025.

On a year-to-date basis, sales to other markets declined by $16 million, or 2%, primarily for medical, conventional energy, and electronics.

This reflected the impact of the timing of shipments and capacity prioritization for key markets,

Comparative information regarding our overall sales by end market and their respective percentages of total sales for the quarters and year-to-date periods ended June 28, 2026 and June 29, 2025 is shown below.

(in millions) Quarter ended Quarter ended

Markets June 28, 2026 June 29, 2025

Aerospace & Defense:

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Total $ 1,261.1 100 % $ 1,140.4 100 %

For the first quarter 2026, international sales increased to $459 million, or 40% of total sales, from $501 million, or 44% of total sales, in the first quarter 2025.

(in millions) Year-to-date period ended Year-to-date period ended

Markets June 28, 2026 June 29, 2025

Aerospace & Defense:

Jet Engines- Commercial $ 980.3 41 % $ 869.2 38 %

Airframes- Commercial 378.3 16 % 401.0 17 %

Defense 301.0 12 % 246.0 11 %

Total Aerospace & Defense 1,659.6 69 % 1,516.2 66 %

Other Markets:

Specialty Energy 120.8 5 % 114.0 5 %

Electronics 66.5 3 % 83.3 4 %

Medical 50.5 2 % 81.3 4 %

Automotive 133.8 5 % 125.4 5 %

Conventional Energy 187.7 8 % 214.7 9 %

Construction/Mining 73.9 3 % 66.2 3 %

Other 119.8 5 % 83.7 4 %

Total Other Markets 753.0 31 % 768.6 34 %

Total $ 2,412.6 100 % $ 2,284.8 100 %

For the second quarter 2026, international sales decreased to $464 million, or 37% of total sales, from $490 million, or 43% of total sales, in the second quarter 2025.

For the year-to-date period ended June 28, 2026, international sales decreased to $923 million, or 38% of total sales, from $991 million, or 43% of total sales, in the year-to-date period ended June 29, 2025.

Comparative information regarding our major products based on their percentages of sales are shown below.

Hot-Rolling and Processing Facility (HRPF) conversion service sales in the AA&S segment are excluded from this presentation.

Quarter ended

March 29, 2026 March 30, 2025

Quarter ended Year-to-date period ended

June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025

Nickel-based alloys and specialty alloys 51 % 48 % 50 % 48 %

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Total 100 % 100 % 100 % 100 %

Gross profit for the first quarter of 2026 was $262.9 million, or 22.8% of sales, compared to $235.8 million, or 20.6% of sales, for the first quarter 2025.

First quarter 2026 gross profit includes $7.9 million of start-up and transaction-related costs and $1.1 million of restructuring-related costs, which are excluded from Adjusted EBITDA.

First quarter 2025 gross profit includes $4.0 million of start-up and transaction-related costs, which are excluded from Adjusted EBITDA.

Gross profit for the second quarter 2026 was $309.8 million, or 24.6% of sales, compared to $242.5 million, or 21.3% of sales, for the second quarter 2025.

Second quarter 2026 gross profit includes $6.1 million of start-up and transaction-related costs, which are excluded from Adjusted EBITDA.

Second quarter 2025 gross profit includes a benefit of $7.0 million related to the recognition of previously deferred employee retention tax credits, of which $4.4 million related to the HPMC segment and $2.6 million related to the AA&S segment, as well as $7.1 million of start-up and transaction-related costs, which are excluded from Adjusted EBITDA.

Our gross profit was $572.7 million, or 23.7% of sales, for the year-to-date period ended June 28, 2026, compared to $478.3 million, or 20.9% of sales for the year-to-date period ended June 29, 2025.

Year-to-date period ended June 28, 2026 gross profit includes start-up and transaction-related costs of $14.1 million and $1.1 million of restructuring-related costs, which are excluded from Adjusted EBITDA.

Year-to-date period ended June 29, 2025 gross profit includes a benefit of $7.2 million related to the recognition of previously deferred employee retention tax credits, of which $4.4 million related to the HPMC segment and $2.8 million related to the AA&S segment.

Year-to-date period ended June 29, 2025 gross profit also includes $11.1 million of start-up and transaction costs, which are excluded from Adjusted EBITDA.

Selling and Administrative Expenses

Selling and administrative expenses for the first quarter 2026 were $92.1 million, an increase of 8.4% compared to $85.0 million for the first quarter 2025.

Selling and administrative expenses for the second quarter 2026 were $95.7 million, an increase of 15.6% compared to $82.8 million for the second quarter 2025.

The increase was primarily due to $11.0 million of transformation and transaction-related costs and $2.6 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA.

First quarter 2025 included $1.6 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA.

Second quarter 2025 included $1.6 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA.

Selling and administrative expenses for the year-to-date period ended June 28, 2026 were 187.8 million, an increase of 11.9% compared to $167.8 million for the year-to-date period ended June 29, 2025.

The increase was primarily due to $18.9 million of transformation and transaction-related costs and $5.1 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA.

Year-to-date period ended June 29, 2025 included $3.2 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA.

Restructuring Charges

First quarter 2026 included restructuring-related severance and impairment costs of $7.0 million due to the rationalization of certain facilities, which are excluded from Adjusted EBITDA.

There were no restructuring charges in first quarter 2025.

Loss on Asset Sales and Sales of Businesses, net

The loss on asset sales and sales of businesses, net of $3.9 million in first quarter 2025 was mostly attributable to the prior year sale of certain immaterial, non-core operations that were part of our European business in the HPMC segment.

Second quarter 2026 included restructuring-related severance, impairment, and other costs of $3.9 million due to the rationalization of certain facilities, which are excluded from Adjusted EBITDA.

Second quarter 2025 included a credit of $1.3 million, due to a reduction in severance-related reserves based on revised workforce reduction estimates.

The year-to-date period ended June 28, 2026 included restructuring-related severance, impairment, and other costs of $10.9 million due to the rationalization of certain facilities, which are excluded from Adjusted EBITDA.

The year-to-date period ended June 29, 2025 included a credit of $1.3 million, due to a reduction in severance-related reserves based on revised workforce reduction estimates.

Gain/Loss on Asset Sales and Sales of Businesses, net

The gain on asset sales and sales of businesses, net of $9.8 million during the quarter and year-to-date periods June 28, 2026 was primarily attributable to the sale of a previously closed manufacturing facility during the second quarter of 2026, which was part of the AA&S segment.

The loss on asset sales and sales of businesses, net of $3.9 million during the year-to-date period ended June 29, 2025 was primarily comprised of a $3.7 million loss on the sale of certain immaterial, non-core operations in Birmingham, UK and Dusseldorf, Germany, which were part of our European business in the HPMC segment.

Interest Expense, Net

Interest expense, net increased to $23.7 million in the first quarter of 2026 compared to $23.0 million in the first quarter of 2025.

Capitalized interest reduced interest expense by $3.0 million in the first quarter 2026 and $3.1 million in the first quarter 2025.

The increase in interest expense, net was primarily related to increased borrowings made on our revolving credit facility in the first quarter 2026.

Interest expense, net decreased to $23.9 million in the second quarter of 2026 compared to $25.4 million in the second quarter of 2025.

Capitalized interest reduced interest expense by $3.2 million in the second quarter 2026 and $2.1 million in the second quarter 2025.

The decrease in interest expense, net was primarily related to the year-over-year increase in interest capitalization on strategic capital projects.

Interest expense, net decreased to $47.6 million in the year-to-date period ended June 28, 2026 compared to $48.4 million in the year-to-date period ended June 29, 2025.

Capitalized interest reduced interest expense by $6.2 million in the year-to-date period ended June 28, 2026 and $5.2 million in the year-to-date period ended June 29, 2025.

The decrease in interest expense, net was primarily related to the year-over-year increase in interest capitalization on strategic capital projects.

Other Income, Net

Other income, net for the first quarter 2026 decreased to $0.8 million compared to $1.5 million in the first quarter 2025.

Our effective tax rate for the first quarter of 2026 was 11.8%, resulting in an income tax provision of $16.1 million, and our effective tax rate for the first quarter of 2025 was 17.3%, resulting in an income tax provision of $21.0 million.

Other income, net for the second quarter 2026 decreased to $1.1 million compared to $1.8 million in the second quarter 2025.

Other income, net for the year-to-date period ended June 28, 2026 decreased to $1.9 million compared to $3.3 million in the year-to-date period ended June 29, 2025.

The change in both the quarter and year-to-date periods is due to a decrease in rental and royalty income.

Our effective tax rate for the second quarter 2026 was 20.0%, resulting in an income tax provision of $38.6 million, and our effective tax rate for the second quarter 2025 was 22.0%, resulting in an income tax provision of $29.3 million.

The lower effective tax rate on a year-over-year basis was primarily due to the timing and amount of discrete tax benefits.

The effective tax rate for the first quarter of 2026 includes discrete tax benefits of $11.9 million, while the effective tax rate for the first quarter of 2025 includes discrete tax benefits of $5.1 million.

The effective tax rate for the second quarter of 2026 includes discrete tax benefits of $1.2 million, primarily for share-based compensation, while the effective tax rate for the second quarter of 2025 includes discrete tax expense of $0.6 million.

Excluding the discrete tax items, the Company's effective tax rate for the second quarter 2026 and 2025 was 20.6% and 21.5%, respectively.

The decline in the effective tax rate primarily reflects the availability of certain deductions in 2026 that were limited in 2025, following the enactment of the One Big Beautiful Bill Act.

Our effective tax rate for the year-to-date period ended June 28, 2026 was 16.6%, resulting in an income tax provision of $54.7 million, and our effective tax rate for the year-to-date period ended June 29, 2025 was 19.7%, resulting in an income tax provision of $50.3 million.

The lower effective tax rate on a year-over-year basis was primarily due to the timing and amount of discrete tax benefits.

The effective tax rate for the year-to-date period ended June 28, 2026 includes discrete tax benefits of $13.0 million, while the effective tax rate for the year-to-date period ended June 29, 2025 includes discrete tax benefits of $4.5 million.

The discrete tax benefits in both periods were primarily for share-based compensation.

Net income attributable to ATI was $118.2 million, or $0.85 per share, in the first quarter of 2026, compared to $97.0 million, or $0.67 per share, for the first quarter of 2025.

Excluding the discrete tax items, the Company's effective tax rate for the year-to-date periods June 28, 2026 and June 29, 2025 was 20.5% and 21.5%, respectively.

The decline in the effective tax rate primarily reflects the availability of certain deductions in 2026 that were limited in 2025, following the enactment of the One Big Beautiful Bill Act.

Net income attributable to ATI was $151.0 million, or $1.09 per share, in the second quarter 2026, compared to $100.7 million, or $0.70 per share, for the second quarter 2025.

Net income attributable to ATI was $269.2 million, or $1.94 per share, in the year-to-date period ended June 28, 2026, compared to $197.7 million, or $1.38 per share, in the year-to-date period ended June 29, 2025.

Business Segment Results

Comparative financial information (in millions) for our segments and corporate operations for the quarterly periods ended March 29, 2026 and March 30, 2025 is shown below.

Quarter Ended

March 29, 2026 March 30, 2025

Comparative financial information for our segments and corporate operations for the quarterly and year-to-date periods ended June 28, 2026 and June 29, 2025 is shown below.

(in millions) Quarter ended Year-to-date period ended

June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025

High Performance Materials & Components $ 637.1 $ 608.8 $ 1,251.4 $ 1,192.9

15 unchanged sentences

Total depreciation & amortization $ 44.0 $ 41.6 $ 89.0 $ 82.4

(a) The Company’s Chief Operating Decision Maker (“CODM”) utilizes the Segment EBITDA as a key metric to evaluate segment performance.

(a) The Company’s Chief Operating Decision Maker (CODM) utilizes Segment EBITDA as a key metric to evaluate segment performance.

Our measure of Segment EBITDA, which we use to analyze the performance and results of our business segments, excludes net interest expense, income taxes, depreciation and amortization, special charges, unallocated corporate expenses, closed operations and other income (expense).

2 unchanged sentences

High Performance Materials & Components Segment

First quarter 2026 sales were $614.3 million, an increase of $30.2 million, or 5%, compared to the first quarter 2025, primarily due to sales growth in the the aerospace & defense markets, which increased $31.2 million, or 6%.

This increase was primarily driven by strong demand for commercial jet engine products, which grew more than 8% on a year-over-year basis.

Comparative information for our HPMC segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the quarters ended March 29, 2026 and March 30, 2025 is as follows:

Quarter ended Quarter ended

Markets March 29, 2026 March 30, 2025

Second quarter 2026 sales were $637.1 million, an increase of $28.3 million, or 5%, compared to the second quarter 2025, primarily due to sales growth in the the aerospace & defense markets, which increased $30.9 million, or 6%.

This increase was primarily driven by strong demand and pricing for commercial jet engine products, which grew more than 10% on a year-over-year basis.

Comparative information for our HPMC segment revenues by market and their respective percentages of the segment’s overall revenues for the quarters ended June 28, 2026 and June 29, 2025 is as follows:

(in millions) Quarter ended Quarter ended

Markets June 28, 2026 June 29, 2025

Aerospace & Defense:

12 unchanged sentences

Total $ 637.1 100 % $ 608.8 100 %

International sales represented 45% of total segment sales for the first quarter 2026, compared to 46% in the prior year period.

Comparative information for the HPMC segment’s major product categories, based on their percentages of revenue for the quarters ended March 29, 2026 and March 30, 2025, is as follows:

International sales represented 40% of total segment sales for the second quarter 2026, compared to 43% in the prior year period.

Comparative information for the HPMC segment’s major product categories, based on their percentages of revenue for the quarters ended June 28, 2026 and June 29, 2025, is as follows:

Quarter ended

March 29, 2026 March 30, 2025

June 28, 2026 June 29, 2025

Nickel-based alloys and specialty alloys 51 % 44 %

2 unchanged sentences

Total 100 % 100 %

Segment EBITDA in the first quarter 2026 was $152.9 million, or 24.9% of total sales, compared to $131.0 million, or 22.4% of total sales, for the first quarter 2025.

The increase in segment margin rate was primarily due to higher volume and favorable sales mix and pricing.

Segment EBITDA in the second quarter 2026 was $153.5 million, or 24.1% of total sales, compared to $144.0 million, or 23.7% of total sales, for the second quarter 2025.

The increase in segment EBITDA margin rate was primarily due to higher volume and favorable pricing, partially offset by higher manufacturing and period costs, including costs associated with revised qualification requirements for our new facility in Mexico and titanium electron-beam furnace.

Sales for the year-to-date period ended June 28, 2026 were $1.3 billion, an increase of $58.5 million, or 5%, compared to the year-to-date period ended June 29, 2025, primarily due to sales growth in the aerospace & defense markets, which increased $62.5 million, or 6%.

The growth in the aerospace & defense markets was primarily driven by strong demand and pricing for commercial jet engine products, which grew more than 9% on a year-over-year basis.

Comparative information for our HPMC segment revenues by market and their respective percentages of the segment’s overall revenues for the year-to-date periods ended June 28, 2026 and June 29, 2025 is as follows:

(in millions) Year-to-date period ended Year-to-date period ended

Markets June 28, 2026 June 29, 2025

Aerospace & Defense:

Jet Engines- Commercial $ 893.0 72 % $ 816.9 69 %

Airframes- Commercial 153.2 12 % 159.1 13 %

Defense 112.5 9 % 120.2 10 %

Total Aerospace & Defense 1,158.7 93 % 1,096.2 92 %

Other Markets:

Specialty Energy 30.9 3 % 27.1 2 %

Medical 17.4 1 % 31.2 3 %

Construction/Mining 22.6 2 % 15.2 1 %

Automotive 1.7 — % 4.2 1 %

Conventional Energy 4.6 — % 3.1 — %

Other 15.5 1 % 15.9 1 %

Total Other Markets 92.7 7 % 96.7 8 %

Total $ 1,251.4 100 % $ 1,192.9 100 %

International sales as a percentage of total segment sales remained flat at 43% for the year-to-date period ended June 28, 2026, compared to the prior year period.

Comparative information for the HPMC segment’s major product categories, based on their percentages of revenue for the year-to-date periods ended June 28, 2026 and June 29, 2025, is as follows:

Year-to-date period ended

June 28, 2026 June 29, 2025

Nickel-based alloys and specialty alloys 48 % 43 %

Precision forgings, castings and components 36 % 39 %

Titanium and titanium-based alloys 16 % 18 %

Total 100 % 100 %

Segment EBITDA in the first half of 2026 increased to $306.4 million, or 24.5% of total sales, compared to $275 million, or 23.1% of total sales, for the first half of 2025.

The increase in segment EBITDA margin rate was primarily due to favorable sales mix and pricing, partially offset by higher manufacturing and period costs.

The Company continues to invest in capacity and to improve work-flow processes and operations.

HPMC results for first quarter 2026 reflected year-over-year improved operating leverage and pricing as we continued to experience strong demand in our key aerospace & defense markets, particularly for commercial jet engine products.

HPMC results for second quarter 2026 reflected year-over-year improved operating leverage and pricing as we continued to experience strong demand in our key aerospace & defense markets, particularly for commercial jet engine products.

We believe our long-term agreements with aerospace market OEMs and backlog for our specialty materials, including powders, parts and components, position the HPMC segment for continued growth.

Advanced Alloys & Solutions Segment

First quarter 2026 sales were $537.2 million, a decrease of $23.1 million, or 4%, compared to first quarter 2025, primarily driven by a $37.8 million decline in sales to the conventional energy market.

This decrease was partially offset by higher sales to the aerospace & defense markets.

The increase in aerospace & defense sales was mostly due to demand for commercial jet engine and defense products, partially offset by lower commercial airframe sales.

Aerospace & defense sales were 43% of the total AA&S sales in the first quarter 2026 compared to 39% in first quarter 2025.

Comparative information regarding our AA&S segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the quarters ended March 29, 2026 and March 30, 2025 is shown below.

Quarter ended Quarter ended

Markets March 29, 2026 March 30, 2025

Second quarter 2026 sales were $624.0 million, an increase of $92.4 million, or 17%, compared to second quarter 2025, primarily driven by higher sales to the aerospace & defense and conventional energy markets.

On a year-over-year basis, aerospace & defense sales grew by 34%, including an increase in defense sales of 90%, reflecting both increased demand and pricing.

Aerospace & defense sales were 44% of the total AA&S sales in the second quarter 2026 compared to 38% in second quarter 2025.

Comparative information regarding our AA&S segment revenues by market and their respective percentages of the segment’s overall revenues for the quarters ended June 28, 2026 and June 29, 2025 is shown below.

(in millions) Quarter ended Quarter ended

Markets June 28, 2026 June 29, 2025

Aerospace & Defense:

13 unchanged sentences

Total $ 624.0 100 % $ 531.6 100 %

International sales represented 34% of total segment sales for the first quarter of 2026, compared to 42% in the prior year’s first quarter.

Comparative information regarding the AA&S segment’s major product categories, based on their percentages of revenue for the quarters ended March 29, 2026 and March 30, 2025, is presented in the following table.

International sales represented 33% of total segment sales for the second quarter of 2026, compared to 44% in the prior year’s second quarter.

Comparative information regarding the AA&S segment’s major product categories, based on their percentages of revenue for the quarters ended June 28, 2026 and June 29, 2025, is presented in the following table.

HRPF conversion service sales are excluded from this presentation.

Quarter ended

March 29, 2026 March 30, 2025

June 28, 2026 June 29, 2025

Nickel-based alloys and specialty alloys 52 % 53 %

3 unchanged sentences

Total 100 % 100 %

Segment EBITDA was $97.0 million, or 18.1% of sales, for the first quarter 2026, compared to segment EBITDA of $83.4 million, or 14.9% of sales, for the first quarter 2025.

The margin rate increase compared to the prior year was primarily due to favorable sales mix changes and favorable pricing of exotic alloys.

Segment EBITDA was $147.6 million, or 23.7% of sales, for the second quarter 2026, compared to segment EBITDA of $76.7 million, or 14.4% of sales, for the second quarter 2025.

Segment EBITDA for the second quarter 2026 includes a $9.9 million gain from the sale of a previously closed manufacturing facility.

In addition, second quarter 2025 included a $2.6 million benefit from the recognition of previously deferred employee retention tax credits.

Excluding the impact of these items, the segment EBITDA margin rate increase compared to the prior year period was primarily due to higher pricing and favorable mix.

Sales for the year-to-date period ended June 28, 2026 were $1.2 billion, an increase of $69.3 million, or 6%, compared to the year-to-date period ended June 29, 2025, primarily due to sales growth in the aerospace & defense markets, which increased $80.9 million, or 19%.

This increase was primarily driven by sales growth to the defense market, which grew by 50%, as well as strong demand and pricing for commercial jet engine products, which grew 67% on a year-over-year basis.

These increases were partially offset by lower volume of commercial airframe products due to end market supply chain constraints and production schedules.

Comparative information for our AA&S segment revenues by market and their respective percentages of the segment’s overall revenues for the year-to-date periods ended June 28, 2026 and June 29, 2025 is as follows:

(in millions) Year-to-date period ended Year-to-date period ended

Markets June 28, 2026 June 29, 2025

Aerospace & Defense:

Jet Engines- Commercial $ 87.3 8 % $ 52.3 5 %

Airframes- Commercial 225.1 19 % 241.9 22 %

Defense 188.5 16 % 125.8 12 %

Total Aerospace & Defense 500.9 43 % 420.0 39 %

Other Markets:

Electronics 66.5 6 % 83.3 8 %

Specialty Energy 89.9 8 % 86.9 8 %

Medical 33.1 3 % 50.1 5 %

Automotive 132.1 11 % 121.2 11 %

Conventional Energy 183.1 16 % 211.6 19 %

Construction/Mining 51.3 4 % 51.0 5 %

Other 104.3 9 % 67.8 5 %

Total Other Markets 660.3 57 % 671.9 61 %

Total $ 1,161.2 100 % $ 1,091.9 100 %

International sales as a percentage of total segment sales declined to 33% for the year-to-date period ended June 28, 2026, compared to 43% the prior year period.

Comparative information for the AA&S segment’s major product categories, based on their percentages of revenue for the year-to-date periods ended June 28, 2026 and June 29, 2025, is presented in the following table.

HRPF conversion service sales are excluded from this presentation.

Year-to-date period ended

June 28, 2026 June 29, 2025

Nickel-based alloys and specialty alloys 52 % 54 %

Titanium and titanium-based alloys 16 % 17 %

Zirconium and related alloys 21 % 18 %

Precision rolled strip products 11 % 11 %

Total 100 % 100 %

Segment EBITDA in the first half of 2026 increased to $244.6 million, or 21.1% of total sales, compared to $160.1 million, or 14.7% of total sales, for the first half of 2025.

Segment EBITDA in the first half of 2026 includes a $9.9 million gain from the sale of a previously closed manufacturing facility.

In addition, results in the first half of 2025 include a benefit of $2.8 million from the recognition of previously deferred employee retention tax credits and a benefit of $2.6 million due to a customer recovery for previously reserved accounts receivable.

Excluding the impact of these items, the increase in segment EBITDA margin rate, compared to the prior year period was primarily due to higher pricing and favorable mix.

Corporate Items

Corporate expenses for the first quarter of 2026 declined to $17.0 million, compared to $17.4 million for the first quarter 2025.

This reduction was primarily due to lower incentive compensation costs.

Closed operations and other income/expense for the first quarter 2026 was expense of $1.2 million, compared to expense of $2.4 million for the first quarter 2025.

The reduction in expense in was mostly due to the impact of foreign exchange losses in the prior year quarter.

Corporate expenses for the second quarter of 2026 declined to $14.9 million, compared to $15.4 million for the second quarter 2025.

The reduction in expenses was primarily due to a benefit from an insurance claim, partially offset by higher incentive compensation expense.

For the year-to-date period ended June 28, 2026, corporate expenses were $31.9 million, compared to $32.8 million for the year-to-date period ended June 29, 2025.

The reduction in expenses was primarily due to a reduction in legal and permitting fees.

Closed operations and other income/expense for the second quarter 2026 was expense of $1.8 million, compared to income of $2.4 million for the second quarter 2025.

Second quarter 2025 benefited from foreign exchange gains of $1.8 million and a favorable bankruptcy settlement related to an insurance claim of $1.1 million.

Closed operations and other income/expense for the year-to-date period ended June 28, 2026 was expense of $3.0 million.

Managed Working Capital

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Further, Management believes this non-GAAP financial measure provides investors with additional insights into the Company’s effectiveness in balancing the need to maintain appropriate asset levels to support sales growth and operations while deploying our cash effectively.

We employ several strategies to actively manage our Managed working capital, seeking to effectively balance the need to maintain appropriate levels of Managed working capital to support our growth and operations while deploying our cash efficiently.

Our strategies include, but are not limited to, taking advantage of favorable customer and supplier payment terms, participating in supplier financing programs, accounts receivable factoring arrangements and other customer financing programs, managing the timing of purchases of raw materials, and leveling manufacturing process throughput and shipping to limit periodic increases in Managed working capital.

We employ several strategies to actively manage our Managed working capital.

We assess Managed working capital performance as a percentage of the prior three months annualized sales.

At March 29, 2026, Managed working capital increased as a percentage of annualized sales to 34.8% compared to 32.5% at December 28, 2025.

At June 28, 2026, Managed working capital increased as a percentage of annualized sales to 34.3% compared to 32.5% at December 28, 2025.

The increase in Managed working capital as a percentage of annualized sales was primarily due to seasonal inventory builds to support increased operating levels and the timing of shipments.

As a result, gross inventory turns, which measures how many times we turn over our inventory relative to cost of sales in a year, worsened by 13% at March 29, 2026 compared to December 28, 2025.

Days sales outstanding, which measures actual collection timing for accounts receivable, was relatively flat at March 29, 2026 compared to December 28, 2025.

The computations of Managed working capital at March 29, 2026 and December 28, 2025, reconciled to the financial statement line items as computed under U.S.

As a result, gross inventory turns, which measures how many times we turn over our inventory relative to cost of sales in a year, worsened by 13% at June 28, 2026 compared to December 28, 2025.

Days sales outstanding, which measures actual collection timing for accounts receivable, improved by 12% as of June 28, 2026 compared to December 28, 2025.

The computations of Managed working capital at June 28, 2026 and December 28, 2025, reconciled to the financial statement line items as computed under U.S.

GAAP, were as follows.

March 29, December 28,

June 28, December 28,

(In millions) 2026 2025

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Liquidity and Financial Condition

The Company's amended Asset Based Lending (ABL) Credit Facility is collateralized by the accounts receivable and inventory of our operations and includes a $600 million revolving credit facility, a letter of credit sub-facility of up to $200 million, a $200 million term loan (Term Loan), and a swing loan facility of up to $60 million.

Additionally, the Company has the ability, through June 13, 2026 and as long as no default or event of default has occurred and is continuing, to borrow an additional term loan of up to $100 million in total, using one or two draws (the Delayed-Draw Term Loan).

The Company's amended Asset Based Lending (ABL) Credit Facility, which is collateralized by the accounts receivable and inventory of our operations, consists of a $200 million term loan (Term Loan) and a $600 million revolving credit facility, which includes a letter of credit sub-facility of up to $200 million and a swing loan facility of up to $60 million.

Additionally, the Company had the ability, through June 13, 2026 and as long as no default or event of default had occurred and was continuing, to borrow an additional term loan of up to $100 million in total, using one or two draws (the Delayed-Draw Term Loan), which it did not exercise.

The ABL facility also provides us with the option of including certain machinery and equipment as additional collateral for purposes of determining availability under the facility.

The ABL term runs through June of 2030.

As of March 29, 2026, there was $75 million in outstanding borrowings under the revolving portion of the ABL facility, and $29.3 million was utilized to support the issuance of letters of credit.

At March 29, 2026, we had $401.7 million of cash and cash equivalents, available additional liquidity under the ABL facility of approximately $495 million, and up to $100 million of availability under the Delayed-Draw Term Loan.

2033 Senior Notes

On June 3, 2026, the Company issued $450 million aggregate principal amount of 5.875% Senior Notes due 2033 (2033 Notes).

Interest on the 2033 Notes is payable semi-annually in arrears at a rate of 5.875% per year.

The 2033 Notes will mature on June 15, 2033.

Net proceeds were $443.1 million from this issuance, of which approximately $350 million was used for the redemption of the Company’s 5.875% Senior Notes due 2027 (2027 Notes), and the remainder is to be used for liquidity and general corporate purposes.

The Company incurred underwriting fees and other third-party expenses related to the issuance of the 2033 Notes totaling $6.9 million, which were recorded as a reduction to the carrying value of the debt and are being amortized over the 7-year term of the 2033 Notes.

The 2033 Notes are unsecured and unsubordinated obligations of the Company and equally ranked with all its existing and future senior unsecured debt.

The 2033 Notes restrict the Company’s ability to incur certain liens, enter into sale leaseback transactions, guarantee certain indebtedness and consolidate or merge with or into another entity or sell, transfer or lease all, or substantially all, of its assets.

Prior to June 15, 2029, the Company has the option to redeem the 2033 Notes, as a whole or in part, at any time or from time to time, at redemption prices specified in the 2033 Notes.

The 2033 Notes are subject to redemption upon the occurrence of a change in control repurchase event (as defined in the 2033 Notes) at a redemption price in cash equal to 101% of the aggregate principal amount of the Notes repurchased, plus any accrued and unpaid interest on the 2033 Notes repurchased.

Redemption of 2027 Senior Notes

On June 8, 2026, the Company exercised its right to redeem the entire outstanding $350 million aggregate principal amount of its 2027 Notes, and The Bank of New York Mellon, as trustee, issued a notice of redemption to registered holders of the 2027 Notes, with the intent to use a portion of the net proceeds from the issuance of the 2033 Notes for the redemption.

As of June 28, 2026, the outstanding balance of the 2027 Notes, net of unamortized debt issuance costs have been classified as current liabilities on the consolidated balance sheets.

All of the outstanding 2027 Notes were redeemed on July 8, 2026.

On July 8, 2026, using a portion of the cash proceeds from the issuance of the 2033 Notes, the Company redeemed the entire outstanding $350 million aggregate principal amount of its 2027 Notes and paid the related accrued interest on the redeemed Notes.

The Company incurred debt extinguishment costs of approximately $1.2 million associated with the write-off of the related unamortized debt issuance costs.

As of June 28, 2026, there were no outstanding borrowings under the revolving portion of the ABL facility, and $29.3 million was utilized to support the issuance of letters of credit.

At June 28, 2026, we had $783.0 million of cash and cash equivalents and available additional liquidity under the ABL facility of approximately $570 million.

Our next significant debt maturity is $325.0 million of 4.875% Senior Notes in the fourth quarter of fiscal year 2029.

Periodically, our Board of Directors authorizes the repurchase of ATI common stock (the “Share Repurchase Program”), the most recent of which was $500 million that was announced in February 2026.

Periodically, our Board of Directors authorizes the repurchase of ATI common stock (the “Share Repurchase Program”), the most recently authorizing the repurchase of up to $700 million, as announced in September 2024, and an additional $500 million announced in February 2026.

Repurchases under these programs are made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs.

Open market repurchases are structured to occur within the pricing and volume requirements of SEC Rule 10b-18.

In the quarter ended March 29, 2026, ATI used $75 million to repurchase 0.5 million of its common stock under the Share Repurchase Program.

At March 29, 2026, the Company has utilized $655 million of the $1.20 billion currently authorized under its currently active Share Repurchase Programs.

In the quarter and year-to-date periods ended June 28, 2026, ATI used $50 million and $125.0 million, respectively, to repurchase 0.3 million and 0.8 million, respectively, of its common stock under the Share Repurchase Program.

At June 28, 2026, the Company has utilized all of the $700 million in repurchase authority announced in September 2024 and $5 million of the additional repurchase authority announced in February 2026.

As of June 28, 2026, total share repurchase authorization remaining under the active Share Repurchase Program was $495 million.

We believe that internally generated funds, current cash on hand and available borrowings under the ABL facility will be adequate to meet our liquidity needs.

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We calculate the Adjusted EBITDA Leverage ratios based on total or net debt at the balance sheet date and Adjusted EBITDA for the trailing twelve-month period from the balance sheet date.

Our Total Debt to Adjusted EBITDA Leverage and Net Debt to Adjusted EBITDA Leverage ratios remained consistent at March 29, 2026 as compared to December 28, 2025.

Our Total Debt to Adjusted EBITDA Leverage ratio at June 28, 2026 worsened as compared to December 28, 2025, primarily due to the issuance of the 2033 Notes.

Our Net Debt to Adjusted EBITDA Leverage ratio improved in second quarter 2026 compared to year end 2025, largely due to a higher cash balance.

The reconciliations of our Adjusted EBITDA Leverage ratios to the balance sheet and income statement amounts as reported under U.S.

GAAP are as follows:

Trailing 12-month period ended Year ended

March 29, 2026 December 28, 2025

(in millions) Quarter ended Trailing 12-month period ended Year ended

June 28, 2026 June 29, 2025 June 28, 2026 December 28, 2025

Net income attributable to ATI $ 151.0 $ 100.7 $ 475.8 $ 404.3

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Net Debt to Adjusted EBITDA 1.47 1.56

Cash provided by operations was $128.2 million in the quarter ended March 29, 2026, a significant improvement compared to cash used in operating activities of $92.5 million in the quarter ended March 30, 2025.

The 2026 period improvement was due to higher net income and improved working capital changes compared to the 2025 period.

Cash provided by operations was $260.0 million in the year-to-date period ended June 28, 2026, a significant improvement compared to cash provided by operating activities of $69.0 million in the year-to-date period ended June 29, 2025 that was due to higher net income and improved working capital changes.

Cash provided by operations was also positively impacted by the sale of $60 million of accounts receivable in exchange for cash under the Receivables Facility.

Working capital balances, and consequently cash from operations, can fluctuate throughout any operating period based upon the timing of receipts from customers and payments to vendors.

Other significant first quarter 2026 and 2025 operating cash flow items included payment of the annual cash incentive compensation.

Cash used in investing activities was $53.6 million in the quarter ended March 29, 2026, which included $55.2 million for capital expenditures primarily for various growth projects to support the aerospace & defense markets.

Cash used in investing activities was $50.6 million in the quarter ended March 30, 2025, reflecting $53.3 million in capital expenditures.

Working capital balances, and consequently cash from operations, can fluctuate throughout any operating period based upon the timing of receipts from

customers and payments to vendors.

Other significant first half 2026 and 2025 operating cash flow items included payment of the annual cash incentive compensation.

Cash used in investing activities was $116.8 million in the year-to-date period ended June 28, 2026, which included $123.8 million for capital expenditures primarily for various growth projects to support the aerospace & defense markets.

Cash used in investing activities was $119.2 million in the year-to-date period ended June 29, 2025, reflecting $125.4 million in capital expenditures.

We expect to fund our capital expenditures with cash on hand and cash flow generated from our operations and, if needed, borrowings under the ABL facility.

Cash used in financing activities was $88.8 million in the quarter ended March 29, 2026, which included $81.1 million to repurchase shares associated with income tax withholdings on share-based compensation and $75.0 million to repurchase 0.5 million shares of ATI stock under our Share Repurchase Program.

These outflows were offset by net borrowings under the Company's ABL of $75 million.

For the quarter ended March 30, 2025, cash used in financing activities was $107.5 million, which included $70.0 million to repurchase 1.2 million shares of ATI stock under our Share Repurchase Program.

At March 29, 2026, cash and cash equivalents on hand totaled $401.7 million, a decrease of $15.0 million from year end 2025.

Cash and cash equivalents held by our foreign subsidiaries was $156.8 million at March 29, 2026, of which $75.1 million was held by the STAL joint venture.

Cash provided by financing activities was $223.4 million in the year-to-date period ended June 28, 2026, which included $450.0 million for the issuance of the 2033 Notes.

These inflows were offset by $125.0 million to repurchase 0.8 million shares of ATI stock under our Share Repurchase Program, $81.7 million to repurchase shares associated with income tax withholdings on share-based compensation, and $16.7 million in payments on finance lease obligations.

For the year-to-date period ended June 29, 2025, cash used in financing activities was $365.8 million, which included $320.0 million to repurchase 4.4 million shares of ATI stock under our Share Repurchase Program.

At June 28, 2026, cash and cash equivalents on hand totaled $783.0 million, an increase of $366.3 million from year end 2025.

Cash and cash equivalents held by our foreign subsidiaries was $183.3 million at June 28, 2026, of which $102.3 million was held by the STAL joint venture.

Reconciliation of Adjusted EBITDA to Net Income

ATI utilizes Adjusted EBITDA, which is a non-GAAP financial measure, to assist in assessing operating performance on a consistent basis across multiple reporting periods by removing the impact of special items, which can vary from period to

period, that management does not believe are directly reflective of the Company’s core operations.

The Company defines special items as significant non-recurring or non-operational charges or credits, including restructuring charges or credits, gains or losses on the sale of accounts receivable, strike related costs, goodwill and long-lived asset impairments, debt extinguishment charges, pension remeasurement gains and losses, other postretirement/pension curtailment and settlement gains and losses, and gains or losses on sales of businesses.

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The following table provides the reconciliation of net income attributable to ATI to the Adjusted EBITDA non-GAAP financial measures:

Quarter Ended

March 29, 2026 March 30, 2025

(in millions) Quarter ended Year-to-date period ended

June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025

Net income attributable to ATI $ 151.0 $ 100.7 $ 269.2 $ 197.7

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(+) Restructuring and other charges (a)

23.6 7.4 50.0 13.0

(-/+) (Gain) loss on sales of businesses, net (b)

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Adjusted EBITDA as a % of sales 22.6 % 18.2 % 21.4 % 17.6 %

(a) First quarter 2026:

Restructuring and other charges of $26.4 million include $11.1 million of start-up and transaction-related costs and $1.1 million of restructuring-related costs, which are primarily reported within cost of sales on the consolidated statements of operations, $7.0 million of restructuring-related severance and impairment costs, $4.8 million of transformation-related costs, and $2.4 million for losses on the sale of accounts receivable, which are reported in selling and administrative expenses on the consolidated statements of operations .

First quarter 2025:

(a) Second quarter 2026:

Restructuring and other charges of $23.6 million include $10.1 million of start-up and transaction-related costs, $7.0 million of transformation-related costs, $3.9 million of restructuring-related severance, impairment, and other costs primarily due to the rationalization of certain facilities, and $2.6 million for losses on the sale of accounts receivable, which are reported in selling and administrative expenses on the consolidated statements of operations .

Second quarter 2025:

Restructuring and other charges of $7.4 million include $7.1 million of start-up and transaction-related costs, which are primarily reported within cost of sales on the consolidated statements of operations, and $1.6 million of losses on the sale of accounts receivable, which are reported in selling and administrative expense on the consolidated statements of operation.

(b) (Gain) loss on sales of businesses, net, of $3.7 million for the quarter ended March 30, 2025 represents a loss on the sale of certain non-core European operations from the HPMC segment.

These charges were partially offset by credits of $1.3 million due to a reduction in severance-related reserves for previous restructuring in the AA&S segment.

Year-to-date 2026:

Restructuring and other charges of $50.0 million include $21.2 million of start-up and transaction-related costs, $11.8 million of transformation-related costs, $10.9 million of restructuring-related severance, impairment, and other costs, $5.0 million of losses on the sale of accounts receivable, and $1.1 million of restructuring-related costs, which are reported within cost of sales on the consolidated statements of operations.

Year-to-date 2025:

Restructuring and other charges of $13.0 million include $11.1 million of start-up and transaction-related costs, which are primarily included within cost of sales on the consolidated statements of operations, and $3.2 million for losses on the sale of accounts receivable, which are included in selling and administrative expenses on the consolidated statements of operations.

These charges were partially offset by credits of $1.3 million due to a reduction in severance-related reserves for a previous restructuring in the AA&S segment.

(b) (Gain) loss on sales of businesses, net, of $3.7 million for the year-to-date period ended June 29, 2025 represents a loss on the sale of certain non-core European operations from the HPMC segment.

Critical Accounting Policies

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis